The final thread in Iowa’s unraveling Affordable Care Act marketplace is hanging on.
Minnesota-based Medica — the last remaining insurer selling individual insurance plans in a majority of Iowa counties — said late Monday that it will sell plans for the 2018 coverage year. The announcement comes on the final day to file rates with the Iowa Insurance Division.
But the price of staying is high — Medica said that for all products, the average proposed rate increase is 43.5 percent.
“Rate increases of 43 percent are not sustainable long term,” said Geoff Bartsh, Medica vice president of individual and family business, in a statement. “We know this will impact people who do not currently receive a subsidy particularly hard.
“The bottom line is that the individual market still needs reform. We will continue to work with federal and state officials to provide the certainty and stability needed for markets to succeed long-term.”
Medica — which currently has 14,000 Iowa members — quickly became the only hope for the majority of Iowan’s relying on the individual insurance exchange, which offers subsidy-eligible plans through the ACA market.
In April, Wellmark Blue Cross and Blue Shield and Aetna announced within days of one another that they would stop selling individual health insurance plans on and off the ACA exchange in Iowa in 2018, affecting nearly 58,000 people. Both insurers cited high costs — Wellmark lost nearly $90 million — and the uncertainty of the ACA’s future.
The GOP-backed American Health Care Act has passed the U.S. House, but its future still is unclear as it is being reworked in the Senate. It is expected to be voted on by the July 4 recess.
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All eyes turned toward Medica and whether it would stay or go — a move that would have made Iowa the first state in the country to not have any insurers selling plans statewide. The insurance company kept its intentions quiet while it conducted a thorough review of the market before committing to a statewide filing.
“When you find yourself as the only ones between people getting access to care and people not getting access to care, your view of the situation becomes very different,” Bartsh said. “We’ve filed with the intent to provide access to insurance for all Iowans, whether they are farmers, small business owners or other individuals who need coverage.”
Last week, Iowa’s Insurance Commissioner asked the federal government to approve a stopgap measure he hoped would both keep Medica in the state and lure other insurers to the state’s marketplace. The measure — which still must be approved by the federal Centers for Medicare and Medicaid Services — would provide consumers with age- and income-based tax credits as well as use a reinsurance mechanism for costly medical claims.
Iowa Insurance Commissioner Doug Ommen said he believes these measures will entice back younger and healthier Iowans who were driven out of the marketplace by rising premiums — which will help stabilize premiums — while reinsurance would better spread out the high costs individuals with serious health needs can create.
Wellmark has signed on, saying last week if the stopgap is approved it would re-enter the marketplace.
“We appreciate and understand Medica’s desire to provide coverage in all of Iowa’s 99 counties. That is our goal as well,” said Ommen in a statement. “We are concerned that Iowa has hit a point within our market’s collapse that a 43 percent rate increase will drive healthier, younger and middle-aged individuals out of the market.
“Iowa’s individual market remains unsustainable and needs a fix from Congress. Iowa will continue to move forward with the Proposed Stopgap Measure.”
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