Iowa Republicans may be doing what Republicans in Washington, D.C. have tried and failed at for eight years — set consumers free from the bounds of the Affordable Care Act.
Gov. Kim Reynolds signed legislation this week to authorize the sale of less-regulated health care plans. State officials say the new law is a response to the “collapse” of the ACA exchange market in Iowa.
Iowa is just one of the states making moves to sidestep overbearing ACA rules after Congress cleared the way last year by repealing portions of the 2010 law, including the individual mandate requiring Americans to purchase insurance or pay a fine.
The underlying goal of the ACA was to force all Americans into the insurance market, thereby distributing costs among the sick and healthy alike. It was the holy grail for insurance corporations and liberal policy wonks, but if you’re one of those healthy Americans, you probably realized by now you got a bad deal.
The landmark Obama-era law also placed stringent regulations on what kinds of health insurance Americans are required to purchase, sometimes including more coverage than people want or need.
Healthy but uninsured Iowans with too much income to qualify for subsidies had two bad choices under the ACA — pay an exorbitant price for a bloated health care plan they don’t need, or face the threat of a hefty tax penalty for violating federal law.
The ACA may have sounded nice in theory, but we now know it did little to decrease costs or increase options for most Americans. It’s no surprise thousands of Iowans are leaving the traditional insurance system.
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Government policy analysts say approximately 26,000 Iowans left the ACA market between 2017 and 2018 because prices were too high, and another 20,000 are expected to leave the market this year.
Those health care outcasts soon will have an alternative. Senate File 2349 specifies that “a health benefit plan sponsored by a nonprofit agricultural organization” is not insurance, and therefore not regulated as such.
Enrollment could start as early as this fall, with coverage starting next January, but big questions remain unanswered about what the new health benefit plans will look like. The Iowa Insurance Division is tasked with developing rules for the new services.
I applaud the new law, but it could have gone farther by opening the non-insurance market up to more players. While the legislation doesn’t specifically name the Iowa Farm Bureau Federation, it is likely the only organization that can meet the legal requirements for offering the new non-insurance health benefit plans.
Farm Bureau Federation leaders point out that before ACA rules effectively banned them, they offered individual health insurance to members since 1969. Farmers, often self-employed and now facing a slumping agricultural economy, will surely benefit, but so too could thousands of non-farmers who can’t afford pricey ACA plans.
There is no good reason for the law to exclude other potential providers. If we are bending federal rules anyway, why not try a little more freedom?
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