Iowa Officially Asks Feds to Approve 'Stopgap' Insurance Plan

Aug 22, 2017

Iowa has submitted a "stopgap" plan to the federal government with the goal of stabilizing the state’s collapsing individual health insurance market.

The plan redirects federal subsidies under the Affordable Care Act to encourage younger, healthier people to buy insurance.

Iowa Insurance Commissioner Doug Ommen says the plan to change parts of the ACA will prevent thousands from dropping insurance. 

"This is not perfect," Ommen says. "And this is not designed to solve every political discussion regarding the Affordable Care Act. This is designed to keep 20,000 people that are paying premiums right now in our market going into 2018."

The only company left on Iowa’s individual ACA market is requesting a 56.7 percent rate hike for next year. Ommen says it is unlikely more insurance companies will be able to enter Iowa’s market in time for 2018. 

A recent economic analysis predicts that without the stopgap plan, about 20,000 Iowans in the individual market would become uninsured next year. With the plan, about 5,000 Iowans would drop off. 

"It brings down the overall premium charge to a level where people in the middle class will stay in large numbers in our market, which is essential to preserve our individual market," Ommen says. 

The U.S. Treasury and Health and Human Services departments need to sign off on the innovation waiver to allow redistribution of federal subsidies. The stopgap plan was initially proposed in June, and federal officials have been working with the Iowa Insurance Division to finalize the proposal. 

Ommen says federal officials have not said when the innovation waiver might be approved.