How will Obamacare impact Iowa?

More than 250,000 Iowans will qualify for health care tax credits, starting next year

More than a quarter of a million Iowans will qualify for health care tax credits starting next year as part of the Affordable Care Act, according to a report released Thursday by a Washington-based health care advocacy group.

The law, commonly known as “Obamacare,” will make credits available starting in January 2014 that are intended to protect low- and middle-income families from spending more than a certain percentage of their household income on health care.

The report by Families USA estimated that 254,000 Iowa residents will be eligible for the credits, including 16,290 in Linn County and another 10,900 in Johnson County.

Most of the newly eligible Iowans will have annual incomes between 200 percent and 400 percent of the federal poverty level, or between $47,100 and $94,200 for a family of four. An enrollment period for the credits will begin in October, with eligibility determined by a sliding scale based on income. Iowans with the lowest incomes will receive the most credits.

Lawmakers react

Reaction to the report ran along partisan lines between Iowa’s two U.S. senators. Democrat Tom Harkin praised the tax credits as a key component of the ACA, while Republican Chuck Grassley was more skeptical.

Harkin, who chairs the Senate Health, Education, Labor, and Pensions Committee, helped write the law and usher it through to final passage in December 2009. Not a single Republican in either the House or Senate supported the bill.

“This important report demonstrates how the Affordable Care Act gives all Iowans access to comprehensive health coverage and highlights how premium tax credits make that coverage affordable,” Harkin said. “These tax credits will be available through Iowa’s insurance marketplace, a transparent ‘one-stop shop’ for health coverage that will start open enrollment on October 1 of this year.

“I encourage all Iowans to explore this new option for affordable, private health insurance.”

But Grassley — a senior member of a health care subcommittee of the Senate Finance Committee — said the credits are far from a guarantee of inexpensive health care.

“There’s a long way to go before anyone in Iowa receives a tax credit, and the report doesn’t speak to how much more expensive premiums will be once Obamacare is fully implemented,” Grassley said. “The value of the credit could easily be overwhelmed by the premium increase. There are still many, many unknowns.”

A Grassley staffer also noted that since a person only qualifies for the credit if his or her employer is not offering acceptable coverage, a high number of people eligible for the credit could mean that more employers are dropping coverage. A Families USA spokesman disputed that, noting that employers have a traditional interest in offering health care to stay competitive in attracting new employees, as well as maintaining a productive and engaged workforce.

Benefit to Iowa?

Iowa health care advocates generally sided with Harkin’s view that the new credits will be an overall benefit to the state by reducing the ranks of the uninsured.

“IHA supports the primary goal of the Affordable Care Act: making sure that fewer Americans are left uninsured or underinsured. Premium tax credits are an important step in that goal,” said Scott McIntyre, communications director of the Iowa Hospital Association. “Such premium support will help Iowans afford comprehensive health insurance that meets their needs without burdening their budgets.”

Other insiders say Iowa’s health care system should easily be able to handle the expected influx of new patients. Dan Eness, a marketing specialist at Iowa Health System, noted that HIS handles more than 4 million patient visits each year. But he also pointed out that an increase in available tax credits may not necessarily translate to an increase of new patients.

“It is safe to say that our organization alone would be able to accommodate an increase of patients,” Eness said.

The report estimates that about 111,000 of the eligible Iowans will have incomes below 200 percent of the federal poverty level, with another 142,000 having incomes between 200 and 400 percent of the level. About 236,000 will be employed, with another 18,000 unemployed.

Iowans between 18 and 34 years old will likely make up the biggest percentage of those receiving the credits, about 36 percent, followed by those between 35 and 54 years old, who will make up about 30 percent of the credit recipients.

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