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Iowa health insurance marketplace: history and news of the state’s exchange

Wellmark offering exchange plans in 40 counties in 2017

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.

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.

2017 enrollment

51,573 people enrolled in private plans through the Iowa exchange during the 2017 open enrollment period (November 1, 2016 through January 31, 2017). That’s a little more than a 6 percent decline from the 2016 open enrollment period, when 55,089 Iowa residents enrolled.

Across all the states that use HealthCare.gov, enrollment dropped by about 5 percent in 2017. This is due in part to the uncertainty surrounding the future of the ACA, and the Trump Administration’s move to cut back advertising and outreach in the final week of 2017 enrollment.

HHS estimated that there were 41,000 people in Iowa with off-exchange coverage in 2016 who would be eligible for subsidies if they switched to the exchange. And Kaiser Family Foundation data indicated that just 20 percent of eligible Iowa residents had enrolled in coverage through the exchange by 2016, the lowest percentage in the country. That may be 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’re offering exchange plans in 2017; details below).

The Iowa exchange and the Trump Administration

Although the future of the Affordable Care Act is uncertain under a Trump Administration, nothing has changed for now. Republican lawmakers have introduced a variety of bills during the 2017 session to repeal or replace various aspects of the ACA, but they have not yet coalesced around any particular plan. The House Freedom Caucus has said that they will not support any bill that’s less comprehensive (in terms of ACA repeal) than H.R.3762, which was vetoed by President Obama in early 2016. But several Senators have said that they will not support a bill that repeals the ACA’s expansion of Medicaid, and H.R.3762 would have repealed Medicaid expansion.

Although Republicans hold the majority in both chambers of Congress, their majority is small, particularly in the Senate. It’s uncertain as of early March whether the will have the votes to be able to enact legislation repealing and/or replacing the ACA. Iowa Senators Chuck Grassley and Joni Ernst, both Republicans, have faced angry crowds in Iowa who don’t want the ACA to be repealed. But so far, both Senators support ACA repeal.

But if the ACA were to be repealed, ACA Signups estimates that 189,000 people in Ohio could lose their health insurance if the law were either not replaced (possible, given the political division in Congress), or replaced with something less robust. 150,000 of them are currently covered under Iowa’s expanded Medicaid coverage. Total net Medicaid enrollment in Iowa grew by 128,556 people from 2013 through December 2016. That’s a 26 percent increase, and is largely due to the state’s expansion of Medicaid (people join and leave the Medicaid program constantly, so the net increase isn’t the same as the total number of people who have gained coverage as a result of expansion).

HHS reported that from 2010 to 2015, the number of Iowa residents with health insurance grew by 132,000 as a result of the ACA — a number that has continued to climb since 2015, largely due to Medicaid expansion.

Wellmark joins exchange for 2017 with two new HMOs; drops Gold plans

Wellmark Blue Cross and Blue Shield, the largest carrier in Iowa’s individual market, did not participate in the exchange in Iowa in 2014, 2015, or 2016. But the carrier joined the exchange in Iowa for 2017, with new, narrow-network HMO plans that became available for purchase on the exchange as of November 1, 2016.

Wellmark’s exchange plans are not available statewide, however. They are available in 40 of the state’s 99 counties, with the carrier’s Mercy Health Network HMO (Wellmark Value Health Plan) the available exchange option in 36 of those counties.

And Wellmark announced in late September that they would no longer offer Gold plans in the individual market, nor would they “promote” individual market PPOs. But they noted that people with existing off-exchange Bronze and Silver PPOs in Iowa would be able to keep those plans in 2017. The switch away from PPOs and towards HMOs and EPOs has been a nationwide trend over the last few years.

Iowa is one of the states that is allowing grandmothered (transitional) health plans to remain in force per the Obama Administration’s m transitional relief, which permits states to allow grandmothered plans to continue to renew until October 1, 2017, and remain in force as late as December 31, 2017. Iowa had initially opted to make October 1, 2016 the latest date these plans could remain in force, but ultimately went along with the guidance that CMS issued in February 2016. An additional extension was issued by the Trump Administration HHS in February 2017, allowing grandmothered plans to remain in force throughout 2018. It’s up to states (and then health insurers) to decide whether to go along with the latest extension or not.

A significant number of Wellmark’s pre-2014 enrollees have opted to keep their non-ACA-compliant plans (roughly 55,000 people still had non-ACA-compliant Wellmark plans in Iowa in 2016), but Wellmark’s expansion onto the exchange means that enrollees who qualify for premium subsidies and cost-sharing subsidies are able to get them in 2017 and also keep the name-brand carrier they already know (Wellmark had been selling ACA-compliant health plans outside the exchange for the last three years, but subsidies are only available on plans obtained through the exchange).

Wellmark had 137,000 individual market members in Iowa in 2015, but the majority of them had non-ACA-compliant health plans. HealthCare.gov’s rate review tool indicates that about 33,000 Wellmark insureds (3,046 plus 29,975) had ACA-compliant plans in 2015, although the Iowa Insurance Division’s August notice regarding Wellmark’s rate increase stated that there were roughly 23,000 members on ACA-compliant plans.

But UnitedHealthcare exited

In November 2015, UnitedHealthcare announced that they were experiencing significant financial losses in the exchanges, and that they weren’t certain whether they would continue to sell plans in the exchanges after the end of 2016. In April 2016, they confirmed that they would exit most of the 34 exchanges where they offered plans in 2016.

Iowa is one of the states where UnitedHealthcare exited the individual market (on and off-exchange) at the end of 2016. According to The Gazette, there were about 9,000 people who needed to secure new coverage during the 2017 open enrollment period. That included 8,700 Iowa residents who had coverage through UnitedHealthcare of the Midlands Inc. and 328 people who had coverage through UnitedHealthcare Life Insurance Co.

IN 2016, United 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 exit is likely to be buffered by the fact that Wellmark has joined the exchange in 2017.

United exited the SHOP (small business) exchange in Iowa, but is continuing to offer small group plans outside the exchange. The company is not offering plans in the Iowa individual market at all in 2017, including outside the exchange.

2017 rates and carriers

Four carriers are offering on-exchange plans in Iowa for 2017. But Medica is the only carrier offering exchange plans in all 99 counties in Iowa. In 13 of the state’s counties, Medica is the only carrier offering plans in the exchange.

According to the Iowa Insurance Division, the following average rate increases were approved for carriers that are offering exchange plans in 2017:

  • Aetna (formerly Coventry): 22.58 percent; Aetna has roughly 42,000 policyholders in Iowa in 2016.
  • Gunderson (merging with Unity Health Insurance): 19.8 percent; Gunderson has 88 policyholders
  • Medica: 19 percent; Medica has 1,367 current policyholders
  • Wellmark (new to the exchange): Average rate increase is 42.6 percent for existing Bronze and Silver PPOs, and 37.8 percent for HMOs. There are currently about 7,800 policyholders with Wellmark’s HMOs, and about 22,000 policyholders who have plans for which the average 42.6 percent rate increase will apply. All of them have off-exchange plans in 2016, but will be able to transition to Wellmark’s on-exchange plans in 2017 if they so choose.

Aetna is not offering exchange coverage in 2017 in most of the states where they participated in 2016. But they’re continuing to offer coverage in the exchanges in four states, including Iowa (the others are Delaware, Nebraska, and Virginia).

Avera did not offer health insurance in the Iowa exchange in 2016 (their plans were all off-exchange), but they had initially filed rates for on-exchange plans to be available in 2017. That’s no longer the case however, and their individual market plans are now only available in South Dakota (they are continuing to offer small group plans in Iowa).

The Iowa Division of Insurance held public hearings about the proposed rates in late July, and consumers expressed their frustration with the size of the proposed rate hikes. But Insurance Commissioner Nick Gerhart noted that there was little the state can do to reign in rate increases if they’re justified by medical spending. Iowa regulators do not have the authority to reject rate increases outright, but can negotiate with carriers. Ultimately, the rates were approved as-filed for 2017.

For people enrolled in plans through the exchange and willing to shop around during open enrollment, premium subsidies mitigate much of the rate increase for the majority of Iowa exchange enrollees who receive subsidies (in 2016, 87 percent of Iowa exchange enrollees were receiving subsidies). Premium subsidies are available in 2017 for the first time for Wellmark enrollees, as long as they switched to a Wellmark plan offered through the exchange. And subsidies are significantly larger in 2017 than they were in 2016, since the average benchmark plan (second-lowest-cost silver plan, upon which subsidy calculations are based) is 25 percent more expensive in 2017.

2016 enrollment

55,089 people in Iowa enrolled in private plans through the exchange during the 2016 open enrollment period, including renewals and new enrollees. For perspective, dring the 2015 open enrollment period, 45,162 people enrolled in private plans through the exchange in Iowa.

By the end of March 2016, effectuated enrollment in the Iowa exchange stood at 48,949. That’s 25 percent higher than the 39,090 effectuated enrollment total at the end of March 2015.

2016 average premiums

Kaiser Family Foundation data indicates that there were still 188,000 uninsured residents in Iowa in 2015, and 47 percent of them were eligible for the state’s expanded Medicaid coverage. Another 16 percent were eligible for subsidies to help purchase private health insurance coverage, as long as they buy a plan through the Iowa exchange.

Of the people who initially enrolled in plans through the Iowa exchange for 2016, 85 percent were eligible for premium subsidies. Their pre-subsidy premium averaged $425/month (a little higher than the $396/month average across all Healthcare.gov states), but their average after-subsidy premium was just $122/month (also a little higher than the $106/month average across all Healthcare.gov states).

For comparison, 85 percent of enrollees also qualified for subsidies in 2015 in the Iowa exchange, but their average pre-subsidy premiums were $371/month, and their average after-subsidy premiums were $111/month.

By March 2016, 87 percent of Iowa exchange enrollees were receiving subsidies that averaged $307 per month.

Consumers had more choices in 2016

The Iowa Insurance Division announced in May 2015 that five carriers had submitted proposals to sell individual coverage in the exchange for 2016 — up from one that offered plans in 2015. Ultimately, four carriers offered exchange plans in Iowa in 2016.

Early in the 2015 open enrollment period, Coventry and CoOpportunity Health both offered plans in the Iowa exchange. But CoOportunity stopped offering policies in late December 2014. 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 Iowa.

But for 2016, Coventry and Medica offered plans state-wide, while two other carriers offered plans in select areas. United Healthcare of the Midlands, and Gunderson offered plans in various areas of the state (although that chart indicates that Avera was also offering plans in the Iowa exchange in 2016, Avera’s 2017 rate filing memo (which has since been deleted, since they’re not offering individual market coverage in Iowa in 2017) noted that they did not participate in the exchange in 2016, and Avera’s website also confirmed that Avera plans were not available in the Iowa exchange in 2016).

Two additional carriers offered small group plans through the exchange in 2016.

For the three carriers that offered individual health insurance in 2015 (two of which were off-exchange only), the approved average rate changes for 2016 were:

  • Wellmark = 17.6 to 28.7 percent increases, across ACA-compliant, transitional, and grandfathered plans. (137,000 members, OFF-EXCHANGE ONLY; rate hike for ACA-compliant off-exchange plans is 24.5 percent)
  • Coventry = 19.8 percent increase (47,000 members)
  • Gunderson = 9.4 percent (60 members, all off-exchange in 2015, but on-exchange plans are available in 2016)

At ACAsignups, Charles Gaba put the weighted average rate increase market-wide at a little over 22 percent. But for people who already had a plan through the exchange, it was 19.8 percent, since those plans were all from Coventry.

However, the average benchmark premium increased by 12.8 percent in Iowa, which was less than the overall average rate increase for on-exchange plans (in Cedar Rapids, the average benchmark premium is 15.4 percent more expensive in 2016). The benchmark plan is just the second-lowest-cost Silver plan in each area – it’s not necessarily the same plan from one year to the next, or even from the same carrier. Iowa is a good example of a new carrier taking over the benchmark position in at least some areas of the state.

With the addition of new carriers and plans in the Iowa exchange, it was extremely important for 2015 enrollees to shop around during open enrollment for 2016 plans. Subsidies are higher in 2016 than they were in 2015, but the increase in subsidies isn’t enough to fully offset the average rate increases on Coventry plans for 2015 enrollees who let their coverage auto-renew.

2015 enrollment

More than 45,000 Iowans singed up for qualified health plans during the second open enrollment period. While an improvement over 2014, the 2015 total was just 20 percent of the estimated 225,000 Iowans who were eligible to sign up on HealthCare.gov. Nationally, about 40 percent of those eligible actually enrolled during the 2015 open enrollment period.

And as expected, not everyone who enrolled ended up keeping their coverage.  Some people never paid their initial premium, and others cancelled their coverage early in the year for one reason or another.  By the end of June+, there were 39,347 people with in-force coverage through the Iowa exchange.

Medicaid expansion

Iowa expanded Medicaid under the ACA, but with a waiver that called for using Medicaid funds to purchase private health plans for eligible residents. But in June 2015, the state announced that they were abandoning their alternative “private option” for Medicaid expansion, and switching Medicaid enrollees to regular Medicaid managed care plans instead. The switch to managed care was initially scheduled for January 2016, but was pushed back to March 2016.

Iowa’s uninsured rate decreased 3.1 percentage points, from 8.1 percent in 2013 to 5 percent in 2014 according to U.S. Census Bureau data. Iowa’s Medicaid/CHIP enrollment grew by 25 percent – about 125,500 people – from 2013 to August 2016, which is no doubt a significant factor in the reduction in the uninsured rate.

2015 premiums up 11 percent on average

A study by The Commonwealth Fund found that 2015 marketplace premiums in Iowa increased by 11 percent on average compared to 2014. The Commonwealth Fund’s study was weighted for differences in premiums between urban/suburban/ rural areas and insurer participation.

2014 enrollment metrics

In total, 29,163 people enrolled in qualified health plans (QHPs) during the 2014 open enrollment, and an additional 36,891 people qualified for Medicaid or the Children’s Health Insurance Program (CHIP).

Just 11.1 percent of Iowa residents eligible to enroll through the marketplace did so in 2014. Iowa tied with neighboring South Dakota for the lowest percentage of eligible enrollees signing up. A Kaiser Health News article attributed the low enrollment in both states to Wellmark Blue Cross & Blue Shield’s decision against participating in the states’ marketplaces rather than a boycott of the Affordable Care Act. In addition, the fact that transitional (pre-2014) plans were allowed to renew meant that overall enrollment in ACA-compliant plans was lower than expected.

A U.S. Department of Health and Human Services report showed the 2014 average, post-subsidy premium for Iowa consumers was $108 per month. The national average in states using HealthCare.gov $82 per month after subsidies. In 2015, the average after-subsidy premium in Iowa increased to $117 per month, and the national average increased to $105 per month (in the 37 states that used Healthcare.gov in 2015). It’s worth noting, however, that variations in after-subsidy premium are a function of income and plan selections – in an area where people have higher average household incomes, average after-subsidy premiums will be higher. That will also be the case in an area where people gravitate to more comprehensive plans. The ACA’s subsidies ensure that for people with equal income, the second-lowest-cost silver plan will be the same price in every area of the country (the exception is areas where the second-lowest-cost silver plan is actually priced so low that subsidies aren’t necessary in order to ensure that the plan isn’t more than the percentage of income cap imposed by the ACA).

Twenty-six percent of Iowa residents selected a bronze plan (20 percent nationally), 57 percent selected a silver plan (65 percent nationally), 12 percent selected a gold plan (9 percent nationally), 4 percent selected a platinum plan (5 percent nationally) and 2 percent selected a catastrophic plan (2 percent nationally). Twenty-six percent of Iowa enrollees were between the ages of 18 and 34.

Iowa’s approach to the marketplace

Iowa operates a partnership exchange with the federal government. The state has occasionally mentioned as a state that may transition to a different model for its exchange. In February 2014, Gov. Branstad floated the idea of a regional exchange in conjunction with South Dakota, Nebraska and Kansas. Bills to convert to a state-run exchange were introduced in Senate committees in both 2013 and 2014, but neither advanced. And as time goes by, it becomes less likely that the state will branch out into its own exchange, or create a regional exchange, due to the start-up costs.

Iowa health insurance exchange links

HealthCare.gov
800-318-2596

Iowa Insurance Division: State Partnership Exchange Plan Management

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.
1-877-955-1212 / consumer.advocate@iid.iowa.gov

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