Iowa may extend non-compliant health care plans

Estimated 37,000 Iowans could be impacted by transitional plan extension

(File photo/Reuters) A man looks over the Affordable Care Act (commonly known as Obamacare) signup page on the website in New York in this October 2, 2013 photo illustration.
(File photo/Reuters) A man looks over the Affordable Care Act (commonly known as Obamacare) signup page on the website in New York in this October 2, 2013 photo illustration.

Iowa insurance officials are considering extending non-compliant plans under the Affordable Care Act through next year, an option given to states by federal authorities earlier this week.

Following a statement from the Centers for Medicare and Medicaid Services at the beginning of this week, the Iowa Insurance Division Commissioner announced he would consider allowing transitional health policies through the end of calendar year 2019.

“I am reviewing the impact of this option and will provide Iowans a decision in the near future,” Doug Ommen, the commissioner, said in a Tuesday news release.

Transitional plans, also known as grandmothered plans, are health insurance coverage plans that were purchased after the passage of the ACA, but before it was fully implemented in 2014.

These plans do not meet certain criteria mandated by the law, and therefore are considered “non-compliant.”

An estimated 37,000 individuals in Iowa are holders of these transitional insurance plans, according to the latest data from the Iowa Insurance Division.

In his announcement, Ommen expressed his concern for the ACA market in Iowa — as he has in the past — and said in the news release Iowans forced to join “the collapsed ACA market in Iowa” would feel the “the full brunt.”


“The ACA structures are flawed and have broken our market,” Ommen said in the statement. “In the meantime, transition plans offer coverage for many Iowans.”

High premiums force some younger, healthier individuals off their plans, therefore destabilizing the individual market further. The commissioner has said that healthy Iowans forced off their non-compliant plans may opt not to have health insurance at all.

“I would expect that until the federal government gives Iowa the flexibility to fix our market, many subsidy-eligible individuals in their 20s and 30s also will continue to avoid the ACA market because even the heavily subsidized marketplace does not deliver affordable plans for our younger population,” Ommen said in this week’s news release.

“Obviously, that is leaving an increasingly older ACA pool.”

Nationwide, allowing the existence of these plans is cited as a major factor in the high premium rates and the destabilization of the individual market, according to Modern Healthcare, a health care-industry publication.

CMS has extended its policy transitional plans several times since 2013, the most recent of which extended it for a year, or until the end of 2018.

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