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Iowa uses a partnership health insurance marketplace with the federal government, so residents enroll via HealthCare.gov. Two carriers – Medica and Wellmark – offer exchange plans statewide, and Oscar offers plans in four metropolitan areas.
For 2023, the overall average rate change amounted to a small increase. Wellmark, which has the majority of the ACA-compliant market share in Iowa, decreased its average premiums slightly, while Oscar and Medica imposed average rate increases of about 5% and 10%, respectively.
Iowa’s exchange enrollment reached a record high for 2023, with nearly 83,000 people signing up for private plans during the open enrollment period for 2023 coverage.
Iowa operates a partnership exchange with the federal government. Iowa residents use the federal marketplace, HealthCare.gov, to compare and purchase coverage. The state is responsible for plan management, consumer assistance, and Medicaid eligibility determination. 72,240 people enrolled in health plans through the Iowa exchange during the open enrollment period for 2022 coverage.
Iowa’s plan management functions include selecting and monitoring the qualified health plans (QHP) that offer policies on the exchange. Iowa’s role in consumer assistance is education and outreach, coordinating the in-person consumer assisters, and overseeing the Navigator program. The federal government manages the exchange website and call center, and funds the Navigator program.
Federal Navigator funding was cut significantly for the fall 2017 open enrollment period (for 2018 coverage), as was funding for outreach and advertising for HealthCare.gov. In 2018, Iowa did not receive any navigator grants at all. But one Iowa organization, First Choice Services, received $100,000 in navigator funding in 2019, and another $100,000 in 2020. And in 2021, when Navigator funding was increased to a record high by the Biden administration, two agencies in Iowa received a total of more than $462,000 (First Choice Services, as well as Planned Parenthood of the Heartland). In 2022, during another round of record-high Navigator funding, those same two organizations received a total of more than $512,000.
The open enrollment period for individual/family health coverage runs from November 1 to January 15 in Iowa. Outside of open enrollment, a qualifying event is necessary to enroll or make changes to your coverage.
Our comprehensive guide to open enrollment explains what you need to know about open enrollment.
We also have a comprehensive guide to qualifying events and special enrollment periods.
There are three insurers that offer exchange plans in Iowa, with plan availability varying from one location to another:
In 2014, plans were available in Iowa’s exchange from Aetna (Coventry), Avera, CoOpportunity, and Gunderson. Coventry and CoOpportunity offered plans statewide, while Gunderson’s plans were only available in five northeastern counties and Avera’s plans were only available in nine northwestern counties.
Early in the open enrollment period for 2015 plans, Coventry and CoOpportunity Health both offered plans statewide in the Iowa exchange, and Avera and Gunderson continued to offer plans in the northern corners of the state. But CoOportunity stopped offering policies in late December 2014 (CoOpportunity had stopped offering private plans to Medicaid expansion enrollees as of November, and their 9,700 members in that program had transitioned to Iowa’s fee-for-service Medicaid program instead). CoOportunity was a CO-OP health insurer formed with funding through the Affordable Care Act. CoOpportunity got into financial difficulty after higher than expected enrollment and claim costs in 2014, and was subsequently liquidated, leaving Coventry as the only marketplace insurer available in most of Iowa.
Avera did not offer health insurance in the Iowa exchange in 2016 (their plans were all off-exchange). But Medica joined the exchange state-wide (Aetna/Coventry continued to offer plans statewide), and UnitedHealthcare began offering exchange plans in most of the state. Gunderson continued to offer plans in just the northeast corner of the state.
UnitedHealthcare’s participation in Iowa’s exchange was short-lived however, as they exited at the end of 2016 (as was the case in most states where they offered exchange plans). In 2016, United had offered plans in 76 of Iowa’s 99 counties, and in 71 of those counties, United offered at least one of the two lowest-cost silver plans in the exchange. In 66 counties, the benchmark plan for a 40-year-old would have been between $25 and $100/month more expensive in 2016 if United hadn’t participated. However, the impact of United’s was buffered by the fact that Wellmark joined the exchange in 2017.
Avera’s initial rate filing for 2017 indicated that they would return to the exchange for 2017. They ultimately reversed course, however, and did not return to the Iowa exchange (as of 2019, their individual market plans are still only available in South Dakota). But Iowa’s exchange still had four insurers participating in 2017, as that was the year that Wellmark finally joined the Iowa exchange (Wellmark had long been the dominant insurer in Iowa’s individual market, but had avoided the exchange for the first three years). Medica was the only carrier offering exchange plans in all 99 counties in Iowa, and in 13 of the state’s counties, Medica was the only carrier offering plans in the exchange. Aetna, Wellmark, and Gunderson all offered plans in select areas of the state. [Aetna had stopped offering exchange coverage in 2017 in most of the states where they participated in 2016. They continued to offer coverage in the exchanges in four states, including Iowa (the others were Delaware, Nebraska, and Virginia). But at the end of 2017, they exited the individual market in all four of those states.]
For 2018, Medica continued to offer plans statewide in Iowa’s exchange, but Wellmark, Gunderson, and Aetna all left the exchange at the end of 2017. So Medica was the only option for Iowa residents who wanted on-exchange plans in 2018.
For 2019, Wellmark rejoined the exchange and began offering plans statewide (in part because they were allowed to partner with Farm Bureau to sell medically underwritten plans outside the exchange; details below). So all exchange enrollees in Iowa had a choice between Medica and Wellmark for 2019 coverage.
This continued to be the case in 2020. And Wellmark also began offering a “Value” plan with a smaller network (“community-based” as opposed to statewide), in addition to their Wellmark Health Plan, although this option was no longer available by 2021.
For 2021, Oscar joined the Iowa exchange with plans available in Des Moines, Dubuque, Sioux City, and Waterloo. All three insurers have continued to participate for 2022 and 2023.
The following average rate changes apply to full-price premiums in Iowa for 2023:
The Iowa Division of Insurance approved all three insurers’ rates as-proposed (details here for Medica and Oscar, and in SERFF filing number WMIA-133287853 for Wellmark).
Iowa’s insurance division held public hearings regarding the proposed rate changes for Medica and Oscar. A public hearing was not necessary for Wellmark’s plans, since the proposed rate change was below the state’s threshold (Wellmark’s rates for grandmothered and grandfathered plans were subject to public hearings, however).
Across all three insurers, the overall average rate increase was very modest, thanks to Wellmark’s slight rate decrease.
But average rate changes only tell part of the story. They only apply to full-price premiums, whereas most people get subsidies and their net rate changes also depend on how much the subsidy amount changes from one year to the next. The American Rescue Plan’s subsidy enhancements will remain in place through 2025 (thanks to the Inflation Reduction Act), making coverage more affordable than it used to be.
Overall average rate changes also don’t account for the fact that premiums increase with age. So even if a person’s insurance company doesn’t change its rates at all, the person’s premium will grow each year just because they’re getting older (subsidies also grow to keep pace with the age-related premium increases; subsidies for older enrollees are much larger than subsidies for younger enrollees).
For perspective, here’s a look back at average rate changes in Iowa’s exchange over the years:
82,704 people enrolled in private individual market plans through Iowa’s exchange during the open enrollment period for 2023 coverage, which was a new record high for Iowa’s exchange (the previous record high had come the year before, when 72,240 people enrolled).
Here’s a summary of how enrollment (during each annual open enrollment period) has changed over the years in Iowa’s exchange:
A note about 2018 enrollment: As of February 2018, the Iowa Insurance Division reported that 46,563 people had in-force ACA-compliant individual market coverage in the state, and nearly 90% of them were receiving premium subsidies. Most of the people who weren’t eligible for premium subsidies had left Iowa’s ACA-compliant individual market for 2018. Although the ACA’s individual mandate penalty was still in effect for 2018, an exemption was available to anyone for whom the lowest-cost bronze plan would cost more than 8.05% of household income; this likely applied to many of the people who left the unsubsidized market in 2018. By November 2018, total enrollment in ACA-compliant individual market plans (including on- and off-exchange plans) in Iowa had dropped to 39,000 people. Virtually all of those individuals had on-exchange coverage, as the off-exchange ACA-compliant market in Iowa appeared to have dwindled to almost no enrollees (due in large part to the fact that pre-subsidy premiums in Iowa were the highest in the country as of 2018, making unsubsidized coverage largely unaffordable for most people). Notably, Iowa still had 68,000 people enrolled in individual market grandmothered and grandfathered plans at that point. Those pre-ACA plans still exist in other states as well, but they don’t comprise the bulk of any other state’s entire individual insurance market.
Kaiser Family Foundation data indicated that as of 2018, just 17% of eligible Iowa residents had enrolled in coverage through the exchange, the lowest percentage in the country (nationwide, the average was 34% at that point). The lower-than-expected enrollment may have been due in part to the lack of marketing for the exchange in the state, or the fact that Wellmark sat out the first three years of exchange operation (they began offering exchange plans in 2017, exited for 2018, but then returned in 2019) while continuing to renew grandmothered and grandfathered health plans for tens of thousands of residents (Wellmark still had 54,500 people enrolled in grandfathered and grandmothered plans as of 2019, which is more than the total number of people enrolled in ACA-compliant plans. By 2022, Wellmark’s grandmothered/grandfathered enrollment had dropped to around 34,000).
Three insurers currently offer dental plans through the Iowa marketplace. Learn about dental coverage options in Iowa.
The Iowa Insurance Division announced on November 1, 2018 that “a non-insurance health benefit plan sponsored by the Iowa Farm Bureau, a non-profit agricultural organization, also begins enrollment today.” That’s referring to the Farm Bureau plans that are allowed as a result of legislation that Iowa enacted in 2018. These plans have frequently been referred to as “junk insurance” in the media, but that’s not really the case. They’re less expensive than full-price ACA-compliant plans, but that’s mostly due to the fact that they use medical underwriting (and as noted above, premium subsidies for ACA-compliant plans are larger and more widely available than usual, due to the American Rescue Plan; most enrollees are eligible for a subsidy, which can bring down the price of an ACA-compliant plan significantly).
The Farm Bureau coverage itself is similar in many respects to ACA-compliant plans, although there’s a lifetime benefit cap of $3 million, whereas ACA-compliant plans don’t have any benefit caps for essential health benefits. But unlike ACA-compliant plans, which cover pre-existing conditions and have to accept all applicants during open enrollment, regardless of medical history, eligibility for Farm Bureau plans is based on an applicant’s medical history (this is how it worked in the individual market in most states prior to 2014). Farm Bureau plans will accept enrollees year-round, as long as they can pass the company’s medical underwriting.
It’s interesting that the Iowa Insurance Division refers to the Farm Bureau plans as “a non-insurance health benefit plan” (which is due to the way the state structured its legislation to allow these plans — they’re not regulated by the state as insurance; this means enrollment in them would have triggered the ACA’s individual mandate penalty prior to 2019, but that penalty no longer applies in 2019 and beyond), and yet one of the plans that Farm Bureau is offering is an HSA-qualified plan that will allow an enrollee to contribute to a health savings account. So as far as the IRS is concerned, the high-deductible health plan that Farm Bureau is offering is a real health insurance product. But the state is not regulating it as such.
After facing the highest pre-subsidy premiums in the country in 2018, Iowa lawmakers were understandably focused on finding ways to reduce health insurance premiums. But they focused on the premise that the best approach to lowering health insurance premiums would be to allow healthy people the opportunity to buy lower-quality plans at a lower price (despite the fact that the long-term effect of this could be to drive premiums even higher in the ACA-compliant market, as an exodus of healthy people leaves a sicker risk pool). Iowa SF2329 and HF2364 were introduced in February 2018 in an effort to allow the Iowa Farm Bureau to sell plans that would not be considered insurance and therefore not subject to insurance regulations. SF2329 passed 40-9 in the Senate in March, and headed to the House.
But at the same time, SF2349, which allows for the creation of employer association health plans, had also passed the Senate in March. Ultimately, the House ended up combining the bills together to create one piece of legislation that simultaneously allows for association health plans and for the sale of the Farm Bureau non-insurance plans. SF2349 was the final legislation — SF2364 was added to it as Amendment H8289, on March 21. The amended bill passed in the House on March 27, and the Senate approved the House’s version on March 27, by a 37-11 vote. The legislation was signed into law by Governor Kim Reynolds on April 2, 2018.
Wellmark has a long history of partnering with the Iowa Farm Bureau, but those plans were no longer allowed to be sold as of 2014, because they weren’t ACA-compliant. The new legislation allows Wellmark to once again partner with the Iowa Farm Bureau to offer health plans that aren’t compliant with the ACA. The legislation is specific to health plans “sponsored by a nonprofit agricultural organization domiciled in (Iowa) and created primarily to promote programs for the development of rural communities and the economic stability and sustainability of farmers,” so it only applies to Farm Bureau and their partnership with Wellmark—other insurers will not be able to just start offering unregulated plans in the state. Not surprisingly, Medica, which was the sole insurer offering plans in Iowa’s exchange in 2018, was opposed to the legislation, as it specifically benefited a competitor, while potentially destabilizing the ACA-compliant market that Medica was already serving.
The fiscal note for SF2349 clarified that the coverage would be self-funded by Farm Bureau, with the insurer (Wellmark) serving as a third-party administrator, rather than the risk-bearing entity. The target market for the Farm Bureau plans is people who left the individual market in Iowa in 2018 due to rising premium costs (people without premium subsidies saw sharp premium increases in 2018), but the legislature also estimated that about 4,000 people who had ACA-compliant coverage in Iowa in 2018 (and who were paying an average of $17,000 in annual premiums) would switch to Farm Bureau plans.
Farm Bureau plans generally only appeal to healthy consumers, and likely to those on the younger end of the age spectrum, because they are medically underwritten. Since they aren’t regulated as health insurance, they can skirt the ACA’s rules about guaranteed issue, essential health benefits, allowable age bands for premiums, and modified community rating (ie, the ACA only allows premiums to vary based on age, zip code, and tobacco use, but Farm Bureau plans can include price variation based on things like medical history and gender).
In a February 2018 press release announcing their intent to rejoin the Iowa exchange in 2019, Wellmark noted that they planned to “explore offering additional options outside of the ACA for Iowans, if state and federal rules allow us to do so.” Wellmark supported the Farm Bureau measure, and partnered with Farm Bureau to administer the new health plans.
Supporters of the Farm Bureau measure believe that it’s the best solution for the roughly 26,000 people who left the individual market in Iowa between 2017 and 2018. These are the people who don’t (normally) qualify for premium subsidies in the exchange, and for whom ACA-compliant health insurance is simply unaffordable (a 40-year-old couple in Des Moines with two children and a household income in excess of $98,400 was paying at least $20,000/year in premiums for the cheapest bronze plan available in 2018, in addition to the out-of-pocket costs; a 60-year-old couple in Des Moines was paying at least $27,000/year in premiums for that cheapest bronze plan if their income exceeded about $65,000. But both of these households would qualify for substantial subsidies in 2021, as a result of the American Rescue Plan).
The idea is that the Farm Bureau plans could provide a lower-cost alternative for these individuals, which is arguably better than being uninsured. But long-term, the results of the Farm Bureau plans could be disastrous. Undoubtedly, the people who will join the Farm Bureau plans will be younger, healthier individuals. And while many of them will be from the population that had already left the individual market, an estimated 4,000 people were expected to be siphoned off from the existing ACA-compliant insurance pool, particularly among young, healthy people. That would serve to further weaken the insurance pool in Iowa.
Iowa has faced a dire situation for people who aren’t eligible for premium subsidies, which could be helped with a state-based reinsurance program, which numerous other states have implemented. The state submitted a 1332 waiver in 2017 that would have included reinsurance, but it was too complex to meet the 1332 waiver rules and the state abandoned it in October 2017 (more details below).
The elimination of grandmothered plans would have helped to stabilize the individual market, as the healthy people on those plans (all of whom got through the medical underwriting process between 2010 and 2013) would have transitioned to the ACA-compliant risk pool. But Iowa has gone along with the federal guidelines that have allowed grandmothered plans to continue to renew. When Iowa regulators announced in April 2019 that grandmothered plans would be allowed to renew again for 2020, their bulletin included a sharp rebuke of the ACA. And when the state announced in 2020 that grandmothered plans would once again be allowed to renew for 2021, regulators noted that they would prefer an approach that leaves this issue entirely up to the state, as opposed to having to wait each year to see if the federal government will allow these plans to renew again. In 2022, the federal government did indeed issue a grandmothered plan extension that allows those plans to continue to renew until further notice, at the discretion of each state and each insurer.
In May 2018, Iowa lawmakers passed SF2316, with unanimous support in both chambers. Among other things, the legislation would have allowed sole proprietors to purchase coverage in the small group health insurance market (as opposed to the individual market), even if they didn’t have any employees besides themselves. Governor Kim Reynolds noted that although she was supportive of the main premise in the bill (allowing domestic stock insurance companies to divide into two or more domestic stock insurers), she could not support the provision that would have allowed sole proprietors without employees to purchase small group coverage.
Reynolds vetoed SF2316, stating that allowing self-employed people without employees to buy small group health insurance “would further destabilize Iowa’s health insurance market. Further, the proposed changes conflict with federal law.”
It’s true that federal law, under the ACA, defines a small group as having two or more W-2 employees who aren’t married to each other. But Virginia had recently enacted legislation (strongly upheld by the Virginia Bureau of Insurance) that allows sole proprietors without employees to purchase coverage in the small group market.
Iowa’s governor felt that a similar provision in Iowa would have been in conflict with federal rules, and she ostensibly was concerned about market destabilization. So self-employed people in Iowa without employees continue to only be able to purchase coverage in the individual market. But as noted above, healthy Iowans who purchase their own coverage also now have the option of buying non-ACA-compliant Farm Bureau plans instead of ACA-compliant individual market plans.
There the introduction of the Farm Bureau plans could also further destabilize Iowa’s ACA-compliant individual market, since healthy people who don’t get premium subsidies will flee the ACA-compliant market and opt for lower-quality, medically underwritten Farm Bureau plans, leaving the ACA-compliant market with a sicker, smaller risk pool.
If small group plans had been made available to sole proprietors, the plans would still have been fully compliant with the ACA, since the same ACA provisions apply to both the individual and small group markets. It’s true that allowing sole proprietors to have access to the small group market (which has year-round enrollment) would have a destabilizing effect on the small group market. It’s worth noting, however, that Governor Reynolds was willing to enact the Farm Bureau legislation, which could destabilize the individual market, in order to expand access to non-ACA-compliant coverage. But she was unwilling to enact legislation that would have had a destabilizing effect on the small group market, but which also would have expanded access to ACA-compliant small group coverage.
Wellmark joined the exchange in Iowa for 2017, after offering only off-exchange plans for the first three years of ACA implementation. But on April 3, 2017, the insurer announced that they would exit the ACA-compliant individual market (both on and off-exchange) at the end of 2017. Wellmark said that the planned exit would mean that roughly 21,400 people would need to secure new coverage for 2018.
All of Wellmark’s ACA-compliant individual market plans terminated on December 31, 2017. But just over a month later, in early February 2018, Wellmark issued a press release stating that they would offer ACA-compliant plans in the Iowa exchange for 2019, “assuming there aren’t any significant changes to the Affordable Care Act.” At that point, the only significant change that had been made to the ACA was the elimination of the individual mandate penalty, effective in 2019.
Wellmark noted that the repeal and replace dialog that dominated the federal government’s health policy discussions in 2017, resulting in significant uncertainty for insurers, “has dissipated just enough that we think we’re able to step back in and serve the market segment that we had historically been in and we want to be in.” This highlights the role that Congress and the Trump Administration had in the myriad insurer exits from the ACA-compliant market across the country at the end of 2017, many of which directly cited federal uncertainty as their primary reason for leaving the market.
Wellmark began offering exchange coverage statewide in Iowa in 2019. Their plans were only available in 40 of the state’s 99 counties, in 2017, with the carrier’s Mercy Health Network HMO (Wellmark Value Health Plan) the available exchange option in 36 of those counties (the Wellmark Value Health Plan was available statewide in 2019).
Wellmark also noted that they would “explore offering additional options outside of the ACA for Iowans, if state and federal rules allow us to do so.” That was a nod to Iowa SF2329, which was ultimately enacted in 2018 and allowed Farm Bureau to partner with Wellmark to sell non-ACA-compliant plans outside the exchange in Iowa, much like the Farm Bureau plans that are sold in Tennessee.
When Wellmark announced their exit from the ACA-compliant market in 2017, the insurer noted that they had lost $90 million in that market over the previous three years. They explained that younger, healthy people have been slow to enroll, leaving an older, sicker pool of insureds — a situation that is not sustainable over the long term. Wellmark in Iowa also had a uniquely expensive enrollee, whose claims totaled $1 million per month (a teenager with severe hemophilia) and who accounted for a quarter of their total rate increase (across all members’ plans) in 2017.
1.64 million Wellmark members in the state were not impacted by the insurer’s exit from the ACA-compliant market at the end of 2017. This included people who had grandfathered and grandmothered individual market Wellmark plans (ie, people whose plans took effect prior to 2014). People with employer-sponsored plans (including ACA-compliant small business plans) and Medicare supplement plans were also not impacted.
Although Medica ended up offering exchange plans statewide in Iowa in 2018, there was a period of time in mid-2017 when there was considerable uncertainty in terms of whether Iowa would have any insurers offering coverage in the exchange for 2018. There is no federal backup system in place if an area were to end up with no participating exchange insurers (or no individual market insurers at all). All areas of the country ultimately ended up with insurers slated to offer coverage for 2018, but there were initially quite a few “bare” spots.
In June 2017, Iowa submitted a 1332 waiver proposal to CMS, asking for expedited approval and leniency in terms of the rules that normally apply to the 1332 waiver process. The Iowa Insurance Division established a page where people could submit and read public comments about the proposal, and the state moved forward with their proposal, dubbed “the Iowa Stopgap Measure,” despite the fact that Medica filed plans for 2018.
Ultimately, Iowa withdrew their waiver proposal a week before the start of open enrollment, when it became apparent that approval would not be granted in time, and that the rules regarding 1332 waivers simply weren’t flexible enough to implement the changes that Iowa was pursuing.
The state wanted a one-year waiver from ACA rules (with the option to renew if necessary) in order to implement their Proposed Stopgap Measure (PSM). CMS declared their waiver proposal to be complete on September 19, opening up a comment period that ran through October 19 (public comments that were submitted can be seen here).
At that point, there would have been very little time for CMS to approve the measure and for Iowa to implement it in time for 2018 coverage. But Iowa had asked that their waiver proposal become effective immediately upon approval (sometime after October 19), and Iowa Insurance Commissioner Doug Ommen noted on September 20 that “We [Iowa regulators] look forward to moving through that [federal public comment period] process and getting that approval. We’re not going to wait [to begin setting up the program] until we get the final approval from the United States because this is really important for Iowa. I’ve compared those rates that were submitted under the ACA and I’ve looked at what it is that is available to Iowans under the stopgap — and frankly, the right answer for Iowa in 2018 will be the stopgap measure.”
However, it’s worth noting that the 56.7 percent average rate increase that Medica proposed (without the 1332 waiver), and which was ultimately approved, was based on the assumption that the federal government wouldn’t continue to fund CSRs. If Congress had allocated the money, or if the Trump Administration had committed to ongoing funding, the rate hikes would have been smaller.
The state could have also improved the risk pool by cutting off grandmothered plans, but they’ve opted instead to allow those plans to continue until the end of 2020. And as David Anderson and Brad Wright explain, Iowa could have also required Medica to offer at least two silver plans in the exchange for 2018, with a minimum price differential, in order to make coverage more appealing to subsidized buyers. In short, there are actions, far less drastic than the proposed 1332 waiver, that Iowa and/or the federal government could have taken in 2017 to provide additional stability to Iowa’s insurance market. As it was, enrollment in Iowa’s exchange increased for 2018, and although it decreased again in 2019, premiums also decreased in 2019, which is a sign of improving market stability.
Ommen’s comments in September 2017 indicated that his office was working with Medica (and possibly Wellmark) to create the infrastructure for the Stopgap Measure ahead of time, so that it could have been implemented immediately if CMS had approved the state’s 1332 waiver. Ommen noted on September 20 that over the past week, he had “some really good communication with the federal government and the Trump Administration. So, we are very, very optimistic we will receive approval” for the 1332 waiver.
In early October, however, there were widespread reports that President Trump had instructed CMS to reject Iowa’s waiver proposal, and there were ensuing questions as to his motivations. Some noted that his overarching focus when it comes to Obamacare is trying to make it fail, which could conceivably include rejecting a waiver — allowed under Obamacare — that lets a state make major changes to Obamacare. But others have pointed out how odd it is for a Republican President to call for the rejection of a waiver proposal that would make a state’s insurance regulations much more conservative. Iowa’s waiver proposal includes market reforms that are similar to some that were proposed earlier in 2017 by Republican lawmakers intent on repealing the ACA.
On October 19, CMS notified Iowa that the state would not be eligible to receive the full amount of the pass-through savings that would result from the elimination of ACA premium subsidies under the waiver (the state had planned to use all of that funding to implement its new program). CMS explained that they would have to retain some of that funding to offset the reduced federal revenues that would not be paid in the form of individual mandate penalties (since fewer people would be insured) and employer mandate penalties (since there would no longer be employer mandate penalties in Iowa if exchange premium subsidies were eliminated, since those are what trigger the employer mandate penalties). CMS also noted that the federal government would no longer receive exchange user fees for Iowa (a reduction in revenue) and would incur costs for making HealthCare.gov unavailable to Iowa residents (an increase in spending). More details about all of this are listed below.
Since 1332 waivers have to be budget-neutral for the federal government, CMS explained that they would have to deduct those four increased costs and/or reduced revenue from the amount of pass-through funding that Iowa would receive if the waiver were to be approved. A few days later, Iowa withdrew their waiver proposal with a tersely worded letter, noting that “Section 1332 waivers in the Affordable Care Act are unworkable.”
In a nutshell, here’s what Iowa was proposing:
There were various counties in a number of states — including Washington, Tennessee, Indiana, Kansas, Missouri, Wisconsin, Ohio, and Virginia — where no insurers initially filed plans for 2018 (or the only participating insurer had withdrawn its filed plans), but all of them were filled over the summer by other insurers or reversed withdrawal decisions. Ultimately, there were no areas of the country with “bare” spots in 2018. But Iowa’s waiver proposal was seen by some as a “just in case” template.
At the federal level, Senator Lamar Alexander (R, Tennessee) introduced S.761 in March, which would allow people to use ACA premium tax credits towards the purchase of off-exchange plans in areas where no exchange insurers offer coverage. The bill did not advance in 2017, but even if it were to be enacted, it would not be of use to people in an area — like most of Iowa if Medica hadn’t offered ACA-compliant plans — facing the possibility of no individual market insurers offering coverage on or off the exchange.
Another bill, S.1201, introduced in 2017 by Senator Claire McCaskill (D, Missouri), would have allowed people in areas without an exchange option to purchase the same coverage that members of Congress and their staffers buy, from DC’s small business exchange. McCaskill’s bill has also did not advance out of committee, and it ended up being a non-issue for 2018, since all areas of the country have exchange insurers offering plans in 2018.
Democratic lawmakers in Iowa introduced S.F.63 in 2023, in an effort to create a buy-in option for Iowa’s Children’s Health Insurance Program (Hawk-i). The legislation, which faces an uphill battle in the state’s GOP-controlled legislature, would allow people to buy into the Hawk-i program (using ACA subsidies, if available) even if they didn’t meet the current age or income guidelines.
A similar concept was considered in Iowa several years ago. In 2017, two Democratic state lawmakers informally proposed a public option that would allow people to purchase Iowa Medicaid, using ACA premium subsidies to offset some of the cost. The proposal had not yet been introduced as legislation at that point, but state Rep. John Forbes and Sen. Matt McCoy held a public meeting to discuss the possibility in June 2017.
The 2018 legislative session in Iowa convened in January, and two bills — S.F.2035 and H.F.2002 — were introduced to create the “Health Iowans for a pubic option” program. But neither bill advanced out of committee by the February deadline (known as “the funnel”), rendering them effectively dead for the 2018 session.
Even if the legislation had succeeded in winning over Republican support in Iowa, it would also have needed approval from the Trump administration.
Although no states currently allow residents who aren’t eligible for Medicaid to buy into the program, it’s an idea that been gaining traction in recent years in some states.
State Exchange Profile: Iowa
The Henry J. Kaiser Family Foundation overview of Iowa’s progress toward creating a state health insurance exchange.
Consumer Advocate Bureau
Provides consumers with assistance in navigating the health care system, assistance programs, and other issues related to health insurance benefits.
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Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
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Our state guides offer up-to-date information about ACA-compliant individual and family plans and marketplace enrollment; Medicaid expansion status and Medicaid eligibility; short-term health insurance regulations and short-term plan availability; and Medicare plan options.