Iowa's 'Stopgap' Insurance Plan Finds Public Support, Moves Toward Approval

Aug 11, 2017

The Iowa Insurance Division is getting close to finalizing its "stopgap" plan to prop up the state’s individual health insurance market under the Affordable Care Act.

An independent economic analysis shows more Iowans will be able to keep their individual ACA health insurance if the federal government approves the state’s stopgap plan.

There’s only one insurance carrier, Medica, planning to sell individual ACA plans in Iowa in 2018. Medica is proposing a rate increase between 43 and 56 percent.

At a public hearing Thursday in Cedar Rapids, Insurance Commissioner Doug Ommen said the analysis confirmed his fear that thousands of people could lose health insurance if the state doesn’t act.

"When Medica did file, it didn’t take long to look at their filings to figure out that it was going to have a dramatic impact on people that are outside the subsidized segment of the market," Ommen says.

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

At the public hearing, people expressed support for the stopgap plan. But many were very concerned about skyrocketing insurance premiums.

Ommen says that’s in line with what he heard at previous public hearings in Council Bluffs and Des Moines.

"We’ve been hearing from people who have been very supportive of our efforts," Ommen says. "It does address some of the collapsing impacts that we’re seeing in our market, and it’s designed to help people." 

Ommen says he made some changes to the plan based on concerns from the public that insurance prices would still be out of reach for people with moderate income.

The stopgap plan would take the insurance subsidies available through the ACA and distribute them differently. Ommen believes more insurance carriers would re-enter Iowa’s marketplace under the stopgap plan and prevent its collapse.

There are about 72,000 Iowans who buy their insurance on the marketplace. Twenty-eight thousand of those people don’t receive subsidies, and they are more likely to drop insurance if there is a big spike in premiums.

The Iowa Insurance Division has one more public hearing planned for Des Moines August 14. The public hearings and economic analysis were required as part of the state innovation waiver process under the ACA.

Ommen says he will submit the final plan to the federal government within several days. He can’t say when a decision will be made, but he expects the stopgap plan will be approved.