King v. Burwell – subsidies are safe
In states that use the federally-facilitated marketplace (FFM) – like Iowa – the availability of subsidies hinged on the outcome of the King v. Burwell lawsuit. The Supreme Court ruled in late June that subsidies are legal in every state, including those that use the FFM. So 33,000 people in Iowa are no longer in danger of losing their subsidies, and subsidies will continue to be available during the upcoming open enrollment for 2016.
If the court had instead sided with the plaintiffs and eliminated subsidies, coverage for those enrollees would likely have become unaffordable. But it’s not just people currently receiving subsidies who would have felt the pinch. The American Academy of Actuaries estimated the premiums across the entire individual market in FFM states would also have increased by about 35 percent (maybe as much as 55 percent), in addition to regular annual rate hikes, if subsidies had been eliminated.
Luckily for the residents, medical providers, and insurance carriers in Iowa, subsidies are here to stay and the individual market is not in danger of destabilization.
looking ahead to 2016
The Iowa Insurance Division announced in May that five carriers had submitted proposals to sell individual coverage in the exchange for 2016 – up from three that currently offer plans. Coventry and Medica will offer plans state-wide, while the rest of the carriers will have plans in select areas. United Healthcare of the Midlands, Avera, and Gunderson will all offer plans in various areas of the state, and two additional carriers will offer small group plans through the exchange.
The added competition and plan choice will be a welcome change for Iowans, who currently have just one carrier (Coventry) in their exchange. Open enrollment for 2016 begins on November 1, with coverage effective January 1, 2016.
News of rate increases for Iowa made headlines in early June, but the most significant rate hikes were proposed by Wellmark, which only sells coverage outside the exchange.
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 is just 20 percent of the estimated 225,000 Iowans who are 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 has kept 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 March, there were 39,090 people with in-force coverage through the Iowa exchange.
Co-op plan folds
Only one insurer – Coventry – currently offers individual plans in the Iowa marketplace. Wellmark, the largest insurance carrier in Iowa, did not participate in the marketplace in 2014 and decided against joining the exchange for the 2015 and 2016 plans years.
A second insurer, CoOportunity Health, had been participating in the marketplace, but stopped offering policies in late December 2014. CoOportunity was a start-up health insurer formed with funding through the Affordable Care Act. The insurer got into financial difficulty after higher than expected enrollment and claim costs in 2014.
Nick Gerhart, the Iowa insurance commissioner, assumed oversight of CoOportunity and determined that the insurer had to be liquidated. With CoOportunity’s withdrawal, Coventry is the only marketplace insurer available in Iowa – but that will change in 2016.
2015 premiums up 11 percent on average
A study by The Commonwealth Fund shows that 2015 marketplace premiums in Iowa are up 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 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 attributes 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.
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.
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 uninsured rate decreased 1.4 points, from 9.7 percent in 2013 to 8.3 percent in 2014 according to the Gallup-Healthways Well-being Index.
Iowa’s approach to the marketplace
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.
Iowa is 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.
Iowa health insurance exchange links
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 / email@example.com