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Iowa health insurance

Most Iowans have insurance, but individual market could be further destabilized by Farm Bureau plans

2018 enrollment update

Medica is the only insurer offering ACA-compliant individual market plans in Iowa in 2018. During open enrollment, 53,217 people enrolled in Media plans through Iowa’s exchange. That was an increase of about 3 percent over the 51,573 people who enrolled for 2017, despite the shorter open enrollment period (just over six weeks, instead of three months), the reduced federal funding for outreach and enrollment assistance, and the fact that most of Iowa’s insurers exited the exchange at the end of 2017.

By February 2018, the Iowa Insurance Division reported that only 46,563 people were enrolled in ACA-compliant plans in Iowa, down from about 72,000 in 2017. Virtually all of those people have coverage through the exchange, as 90 percent of them are receiving premium subsidies, which are only available through the exchange (for perspective, there were 46,519 people with effectuated on-exchange coverage in Iowa as of February 2017). But while there were more than 20,000 people with off-exchange ACA-compliant coverage in Iowa in 2017, that number has dropped to just a few hundred.

People who receive premium subsidies are insulated from the sharp rate increase that hit Iowa’s individual market in 2018, but those who aren’t eligible for premium subsidies – including everyone who shops off-exchange – have to shoulder the full weight of the premiums, which are simply unaffordable in many cases.

Wellmark has said that they intend to return to the Iowa exchange in 2019 (after joining for just one year, in 2017, and then leaving at the end of 2017), and the state enacted legislation in April 2018 that will allow Farm Bureau and Wellmark to offer non-ACA-compliant plans in the state. These plans will not be considered insurance, and will thus not be regulated by the Iowa Insurance Division. They will not have to follow ACA rules, so they will likely only appeal to young, healthy Iowans, which might further exacerbate the market instability that Iowa is facing.

Iowa health ratings

Iowa was ranked 6th place in the Commonwealth Fund’s 2017 Scorecard on State Health System Performance, which evaluates the performance of the 50 states and the District of Columbia on more than 40 health measures. The state is a top performer when it comes to healthcare access, prevention & treatment, and equity.

Iowa’s scorecard includes a 1st place ranking for the percentage of adults who went without health care due to cost in the past year. As of 2017, just 54,070 more adults would have needed to gain insurance in Iowa in order for the state to climb to the best overall ranking for the uninsured metric. However, the uninsured rate has undoubtedly climbed in 2018, as more than 20,000 people have left the individual insurance market in the state, due to skyrocketing premiums for people who don’t get premium subsidies. Some may have obtained coverage elsewhere, but many have likely joined the ranks of the uninsured.

America’s Health Rankings look at a somewhat different set of measures, and Iowa ranked 15th overall in 2017, up from 22nd overall in 2015. The state’s low percentage of uninsured individuals bolstered Iowa’s placement in this ranking as well – for the lack of health insurance measure, Iowa placed 5th in 2017, the same as they scored in both 2015 and 2016. According to U.S. Census data, only four states and the District of Columbia had lower uninsured rates than Iowa in 2016, and the uninsured rate was just 4.3 percent. But as noted above, that’s likely to have increased in 2018.

Another source for Iowa public health information is the Trust for America’s Health; see Key Health Data About Iowa. Finally, you can zoom in and get county-by-county health rankings for Iowa from the Robert Wood Johnson Foundation and the Population Health Institute at the University of Wisconsin.

Obamacare’s impact in Iowa

Iowa is one of the states that embraced health care reform for the most part, but crucially, the state allowed grandmothered plans to continue to exist in Iowa, and Wellmark didn’t join the exchange until 2017 (and then left at the end of 2017). Wellmark had 137,000 individual market members in Iowa in 2015, but most of them had grandmothered and grandfathered plans. Only about 33,000 Wellmark insureds had ACA-compliant plans in 2015, and the Iowa Insurance Division’s 2015 notice regarding Wellmark’s rate increase stated that the insurer had only 23,000 members on ACA-compliant plans at that point.

The continuation of Wellmark’s grandmothered plans, combined with the fact that Wellmark stayed out of the exchange in the early years, meant that Iowa’s ACA-compliant individual market has been less stable than it would otherwise have been. But the state’s pre-ACA uninsured rate was relatively low, with a state-partnership exchange and Medicaid expansion in effect since 2014 open enrollment, its uninsured rate continued to drop through 2016. But again, it has likely increased in 2018.

A Kaiser Family Foundation report estimated that, as a result of the Affordable Care Act, 71 percent of Iowa’s 301,000 nonelderly uninsured residents would qualify for either Medicaid or tax subsidies to help pay for coverage purchased through the marketplace.

Exchange rates, carriers for 2017 and 2018

Many exchanges saw carriers exit at the end of 2016, and Iowa was no exception with the loss of UnitedHealthcare. However, Iowa’s exchange included new carriers for 2017 – Avera, and Wellmark Blue Cross and Blue Shield.

Four carriers offered plans through Iowa’s exchange during 2017 open enrollment – their rate increases are also included below.

  • Aetna (formerly Coventry) – Iowa is among the few states where Aetna continued to offer ACA plans in 2017: 22.58 percent
  • Gunderson (merged with Unity Health Insurance): 19.8 percent
  • Medica: 19 percent
  • Wellmark (new to the exchange for 2017): 42.6 percent

For 2018, however, Aetna, Wellmark, and Gunderson stopped offering coverage. For individual market coverage in 2018, the options are all from Medica, and the insurer had an average rate increase of nearly 57 percent. This was offset by correspondingly larger premium subsidies, but there was no assistance available for people with income above 400 percent of the poverty level, as they don’t qualify for premium subsidies.

Open enrollment for 2018 coverage ended on December 15, 2017. But people who experience a qualifying event can still enroll in 2018 coverage. Medicaid and CHIP enrollment are year-round, and Native Americans are eligible to enroll in private plans in the exchange year-round.

Iowa enrollment in qualified health plans

About 29,000 Iowans of an estimated market of 224,000 eligible residents enrolled in a qualified health plan (QHP) through Iowa’s exchange during the 2014 open enrollment period. That’s just 13 percent, below the national average of 28.0 percent. Among Iowa residents who signed up for a QHP for 2014, 84 percent qualified for tax subsidies to help offset the premium cost.

During the 2016 open enrollment period, 55,089 people bought private plans through Iowa’s exchange. As of March, effectuated enrollment was 48,949 – 25 percent higher than last year at the same time.

Enrollment dropped by about 6 percent for 2017, with 51,573 people enrolled in private plans during open enrollment. Across all of the states that use there was an overall enrollment decline of about 5 percent. This was due in part to the uncertainty surrounding the future of the ACA, and the Trump Administration’s decision to scale back advertising and outreach in the final week of open enrollment.

For 2018 coverage, enrollment grew by about 3 percent in Iowa’s exchange. But off-exchange enrollment in ACA-compliant plans plummeted, due to insurer exits from the market and much higher premiums for the remaining Medica plans, which can’t be offset by subsidies outside the exchange.

Iowa and the Affordable Care Act

Iowa Sen. Thomas Harkin (D) voted yes and Sen. Charles Grassley (R) voted no when the Affordable Care Act was passed in 2010. Sen. Grassley remains in office; however, Sen. Harkin retired and was replaced by Joni Ernst (R) in 2015. Both Grassley and Ernst are opposed to the ACA, and both voted yes on the January 2017 budget resolution to begin the process of drafting reconciliation legislation to repeal the ACA. They also both voted yes on all three measures that the Senate considered in 2017 to repeal the ACA (the BCRA, “skinny repeal” and the Obamacare Repeal Reconciliation Act).

In 2009, Grassley proposed an amendment to require members of Congress and their staffs to use the health insurance marketplace – even though the marketplace was intended for individuals and small businesses. The Grassley Amendment was included in the final bill; Congress and their staffers use the DC small business exchange to sign up for health insurance coverage (as opposed to the FEHBP plans that they used to have). Confusion over the amendment led to charges that Congress was exempting itself from Obamacare.

Three Iowa House members – all Democrats – voted in favor of the ACA, while two Republicans voted against it. Iowa has since lost a seat in the House through the reapportionment process. Three of the four remaining representatives are Republican, and one is a Democrat.

Within the Iowa legislature, Republicans control both chambers after taking over control of the Senate in the 2016 election and retaining control of the House.

Former Gov. Terry Branstad, a Republican, was not supportive of the Affordable Care Act. In 2011, Branstad signed Iowa onto Florida’s lawsuit challenging the ACA. Branstad stated a preference for a state-based insurance marketplace, but said the federal government had not provided enough information for Iowa to proceed with that option. Iowa currently operates a state partnership marketplace.

Current Gov. Kim Reynolds, elected in 2016, is also a Republican, and supported the Graham-Cassidy bill to repeal the ACA in 2017 (that measure did not pass). Reynolds expressed disappointment when the state was forced to withdraw its 1332 waiver proposal that would have radically changed the ACA within Iowa.

The federal government approved two Iowa waiver applications to expand Medicaid under the ACA. One waiver was the so-called “private option,” with Medicaid funding used to pay for the purchase of private health insurance through the marketplace for residents with incomes between 100 and 138 percent of the federal poverty level (FPL). The other waiver expanded Iowa’s existing Medicaid program, which is called the Iowa Wellness Plan, to nonelderly adults with incomes up to 100 percent of FPL.

By 2015, however, Iowa had abandoned their private option waiver in favor of standard Medicaid expansion as called for in the ACA. But the state switched to a managed care program (IA Health Link) for most Medicaid enrollees as of 2016.

Iowa Medicaid/CHIP enrollment

Iowa is among the states that have accepted federal Medicaid expansion. The state initially received a waiver from CMS allowing it to take a slightly different approach and still receive federal funding.

In 2014 and 2015, Iowa’s alternative to ACA Medicaid expansion involved a program called the Iowa Health and Wellness Plan in which residents with household incomes below the federal poverty level were enrolled in a state-run health plan called the Iowa Wellness Plan; some paid modest premiums. Those with incomes of 101 to 138 percent of the federal poverty level purchased marketplace coverage through a program called the Iowa Marketplace Choice Plan and their premiums were paid by the federal government.

Two waiver amendments approved in Dec. 2014 allow the state to continue not providing non-emergency transport and also charge a monthly premium for those with incomes under 138 FPL – those who complete a wellness exam and health-risk assessment could reduce or eliminate these premiums.

In 2015, the state announced that they would switch to regular Medicaid expansion as outlined in the ACA. But they also obtained a waiver that allowed them to switch Medicaid enrollees to Medicaid managed care plans (most states were already using Medicaid managed care plans at that point). The switch to managed care was slated to happen as of January 2016, but was delayed until April 2016.

Initially, there were three insurers offering managed care plans in IA Health Link, but that dropped to two in last 2017, and one of them stopped enrolling new members for a few months in late 2017 and early 2018. By the spring of 2018, new enrollees were once again able to select from two managed care providers — Amerigroup and UnitedHealthcare

Forty-seven percent of Iowa’s 301,000 nonelderly uninsured residents qualify for Medicaid or the Children’s Health Insurance Program (CHIP), according to the Kaiser Family Foundation. The average monthly enrollment for Iowa Medicaid grew by 165,549 people from 2013 through November 2017, an increase of 32 percent.

More information about Iowa Medicaid is available at the Iowa Department of Human Services.

Other ACA reform provisions

The ACA’s Consumer Operated and Oriented Plan (CO-OP) Program encourages the creation of nonprofit, consumer-run health insurance issuers. Twenty-four CO-OPs received loans totaling $1.98 billion as of January 2013. CoOportunity Health, which operated in Iowa and Nebraska, received $112.6 million.

But CoOportunity Health stopped selling plans in both states as of late December 2014. It was the first of the nation’s CO-OPs to fail, but almost all of the others failed in 2015 and 2016, leaving just four CO-OPs operational as of 2018.

Does Iowa have a high-risk pool?

Before the ACA reformed the individual health insurance market, coverage was underwritten in nearly every state, including Iowa. Applicants with pre-existing conditions were often unable to purchase private coverage, or found themselves with very limited options that didn’t cover their pre-existing conditions.

The Iowa Comprehensive Health Association (otherwise known as Health Insurance Plan of Iowa, or HIPIOWA) was established in 1987 to give people an alternative if they weren’t eligible to buy private plans because of their medical history.

Under the ACA, all new health insurance policies became guaranteed issue starting on January 1, 2014. As a result of this reform provision, there is no longer a pressing need for high-risk pools. HIPIOWA is still operational, but membership has steadily declined since 2013.

At a Jan. 2014 board meeting, there was a discussion about the need to inform members of their options under the ACA and the fact that legislation would be needed for HIPIOWA to cease operations. At that same board meeting, it was noted that a large number of members had terminated their coverage in January, likely because they had found a better option in the newly guaranteed-issue individual market. But four new applications for HIPIOWA coverage had been received that month, and there were no immediate plans to terminate coverage.

The program had 3,002 members as of Dec. 2013, and just 391 members as of September 2016. Operating costs for HIPIOWA were $11.9 million in 2016. Of that amount, about 30 percent was covered by members’ premiums, and the rest was covered by an assessment on insurance companies operating in Iowa. Premiums are based on 150 percent of the average premiums charged by the top five insurers in the individual market in the state, although Medica is the only individual market insurer offering plans in 2018. HIPIOWA premiums for 2018 are available here.

Medicare in the state of Iowa

In 2015, Iowa Medicare enrollment was 571,596, about 18 percent of the state’s total population. 86 percent of the state’s Medicare beneficiaries qualified based on age and 14 percent as a result of disability.

At $7,727, annual per-enrollee Medicare spending in Iowa falls well below the nation’s average of $8,970. When it comes to total overall spending, Iowa ranks 32nd and spends $4.3 billion annually.

Medicare Advantage offers Iowans additional health benefits through private plans instead of Original Medicare. 18 percent of Iowa Medicare recipients chose a Medicare Advantage plan in 2017. Nationwide, that figure was 33 percent.

Iowans can also select stand-alone prescription drug plans called Medicare Part D. 63 percent of the state’s Medicare beneficiaries selected this Medicare prescription drug coverage in 2015, higher than the national average of 45 percent (this makes sense, given the relatively small percentage of people enrolled in Medicare Advantage; Medigap plans are used by people who don’t have Medicare Advantage, which is a larger than average percentage of Iowa’s Medicare population).

Iowa’s state-based reform legislation

Scroll to the bottom of the page to see what’s happening legislatively in Iowa with healthcare reform at the state level

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 Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.