Insurance exchanges largely a mystery

DES MOINES - State officials say they're on track to open Iowa's health care exchange in three months and start enrolling the first wave of Iowa's estimated 300,000 uninsured residents in new health plans.

But in the lead up to today's deadline for companies to submit policy proposals to the state insurance commissioner, it was unclear what type of plans would be available or how much they would cost.

Under the Patient Protection and Affordable Care Act, states are required to have insurance exchanges in which people can purchase health insurance, often at discounted or subsidized rates.

Every state has to follow federal guidelines, but specifics and experiences can vary greatly from state to state.

Colorado, for example, has embarked on a multimillion-dollar ad campaign to educate people about the law after insurers offered more than 200 polices for sale on its exchange. In Mississippi, however, state officials report that only two insurance carriers are offering plans, leaving residents of 36 of the state's 82 counties without exchange options.

“I don't know a nice, neat answer,” said Dick Cauchi, a health care researcher with the National Conference of State Legislatures. “Every state is rolling this out a little differently. Certainly, Iowa is not alone in its approach, but we'll have to wait and see what happens with all the exchanges.”

Iowa Insurance Commissioner Nick Gerhart confirmed that only one company - a new one called CoOpportunity Health - has offered policies for the exchange. Specifics, Gerhart said, will be released after today's deadline expires.

“I expect that we'll have three or four companies that ultimately will make proposals, and we'll be able to announce those next week,” he said Thursday. “We haven't seen their proposals, but we've had some commitments.”

Why the insurance companies remain tight-lipped about their plans moving forward has to do with market position, actuarial predictions, the bottom line and possibly other reasons known only to those in the front office.

“It's just a business decision not to announce what we plan to do until after the deadline,” said Traci McBee, a spokeswoman for Wellmark Blue Cross and Blue Shield, the state's largest insurer with 2 million customers in Iowa and South Dakota.

Two weeks ago, the company announced it would not be raising policyholder rates in 2014, following several years of annual increases. The announcement fed speculation the company was holding off on rate increases until exchange policies were posted.

Officials at UnitedHealthcare, Iowa's second-largest insurer with 1 million fewer policyholders in the state than Wellmark, also kept their plans private.

“We are simply taking the time to carefully evaluate and better understand how the exchanges will work to ensure we are best prepared to participate meaningfully in their development and continue to provide the service our current customers and members have come to expect,” company spokesman Kevin Shermach wrote in an email. “As the economics, sustainability and dynamics of the exchange continue to become clearer over time, the exchange has the potential to be a growth market with much to offer UnitedHealthcare, other insurers and consumers.”

State Sen. Amanda Ragan, D-Mason City, one of the Legislature's health care reform policy experts and the executive director of a soup kitchen in Mason City, said she's been getting questions.

“People just want to know what's going on and what the plans will look like,” Ragan said. “Right now, I have to tell them that I don't know either. We're just waiting to see.”

Tim Albrecht, spokesman for Gov. Terry Branstad, indicated in an email that the governor is confident consumers will have options to choose from by Oct. 1, which is when federal law says plan comparisons have to be readily available for consumers.

“The health benefits exchange, being set up in partnership with the federal government, will have a robust offering of coverage options including multiple statewide plans,” Albrecht said.