Homenews

Iowa’s pitch to save Obamacare looks a lot like the House GOP’s effort to destroy it

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The state is seeking permission from the federal government to test the House Republican’s health care vision.

House Speaker Paul Ryan and team speak during a news conference on the American Health Care Act in Washington. Credit: AP Photo/Susan Walsh

Iowa is trying to avoid a total collapse of the individual health insurance market — but it’s unclear whether this will actually save Iowa’s Obamacare exchange or sabotage it.

Iowa’s state-level insurance marketplace for 2018 is already in flux with two insurers announcing they are not participating in the exchanges amid uncertainty, leaving just one insurer that offers coverage statewide. Now, in an attempt to protect the marketplace, Iowa is seeking federal permission to rework the Affordable Care Act (ACA) through a waiver. States can request changes to the ACA by submitting 1332 state waivers to the federal government; to date, only one has been approved.

But the effort — dubbed “Iowa’s Proposed Stopgap Measure” — looks strikingly similar to the GOP-backed health bill that recently passed the House, the American Health Care Act (AHCA). And let’s not forget: the AHCA would leave 23 million additional people uninsured.

Health wonks immediately drew comparisons between the AHCA and Iowa’s so-called stopgap plan.

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The request is three-pronged: the state is looking to restructure Obamacare subsidies, establish a reinsurance program to help insurers deal with high-cost claims, and create one type of insurance plan.

Iowa’s proposed changes to the premium tax credits would most resemble the House Republican plan because they would provide a fixed level of financial assistance based on age and would not adjust for geographic variation. This would be particularly damaging to patients from rural Iowa, which account for 46 percent of marketplace consumers. In rural areas, premiums tend to be higher because the low population density often raises the cost of providing medical care.

The plan also eliminates Obamacare cost-sharing reductions, which help reduce low-income people’s out-of-pocket costs. Right now, 27,593 marketplace enrollees receive these cost-sharing subsidies, accounting for 51 percent of marketplace enrollees in the state, according to the Center on Budget and Policy Priorities.

Unlike the House Republican plan, Iowa’s plan does require insurers to cover 10 essential health benefits with no wiggle room to opt out. And income factors into premiums’ tax credits as well.

Both the AHCA and Iowa’s proposed plan look to the federal government for money to stabilize the individual market premiums. Iowa’s reinsurance program would repay insurers for patients with extremely expensive health problems. Iowa is asking the federal government to contribute $80 million to that approach. Reinsurance was a temporary program during Obamacare’s inception to mitigate the effects sick people had on the exchange pool. Alaska sought a state innovation waiver to enact a similar plan, but the federal government has yet to approve it.

Iowa’s stopgap plan diverges from the AHCA with an attempt to streamline Obamacare by creating one plan, modeled after Obamacare’s silver plan. Under the silver plan, patients pay moderate monthly premiums and moderate costs when they need care. On face value, this looks to eliminate enrollees’ options, which conflicts with the GOP platform to provide more.

Iowa’s plan does not mention anything about Medicaid. Iowa is among the 31 states that expanded Medicaid. About 150,000 Iowans could lose coverage under the floated GOP health bill, according to Kaiser Family Foundation. The stopgap plan does nothing to safeguard these patients.

Wellmark Blue Cross and Blue Shield, one of the two insurers that said it would stop selling ACA plans in 2018, said it would reconsider if the Trump Administration approves Iowa’s plan, according to Bloomberg. Insurers in Iowa must file rates and plans for 2018 by June 19.

For that reason, Iowa requested an expedited review of its waiver, specifically requesting a 14-day turnaround. The Obama administration did issue rules for the state waiver application; the ACA only provides a suggested checklist to states. It will be up to President Trump and his administration to decide whether Iowa’s AHCA-lite plan should be approved.


Iowa’s pitch to save Obamacare looks a lot like the House GOP’s effort to destroy it was originally published in ThinkProgress on Medium, where people are continuing the conversation by highlighting and responding to this story.

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