Iowa wants help from the federal government to bail out the state's individual health insurance market, which has emerged as a leading example of troubles with the federal Affordable Care Act (ACA).
In recent months, two leading carriers have announced plans to exit Iowa's individual market for 2018, which means Minnetonka-based Medica could be the only insurer offering coverage to individuals statewide next year.
Medica officials, however, have said they can't continue the Iowa business without changes that would help stabilize the market. Several health plans have dropped the Iowa market after losing millions of dollars.
"In Iowa, we are in a collapsing market because of the fact that the healthy and young individuals are not participating," said Doug Ommen, the Iowa insurance commissioner, during a news conference. He said the proposal announced Monday is "a stopgap measure in order to address the crisis that we have here in Iowa, and our collapsing individual market."
The troubles are confined to the individual market, which serves self-employed people and those who don't get health insurance from their employer or a government program. About 72,000 people buy coverage in Iowa's individual market.
The proposal announced Monday would change the structure of federal tax credits provided by the ACA so that younger enrollees would get more help, and subsidies would become available to those with higher incomes. The Iowa proposal also would eliminate "cost-sharing reduction" funds for low-income residents by redirecting the money to mitigate likely premium increases.
Iowa regulators are calling for a "reinsurance" program to help insurers cover the cost of patients with high-cost medical conditions. The ACA offered such a program through 2017, and Minnesota lawmakers have called for creating a reinsurance program to ensure health plans will compete next year in Minnesota's market.
The proposed changes in Iowa include provisions to stabilize the market that Medica has called for, including a reinsurance program, said Geoff Bartsh, a Medica vice president, in a statement. But the plan also includes "significant changes to the subsidy structure that will have an impact on which consumers do and don't buy coverage," Bartsh said.