Latest attempt to skirt ACA: Iowa's 'health benefit plans'
Because the new plans will not be defined as “health insurance,” they will not be subject to a variety of state and federal insurance regulations. Or so proponents hope.
The latest attempt by Republicans to weaken the Affordable Care Act comes from Iowa, where Gov. Kim Reynolds is poised to sign a bill that will allow the sale of health plans that do not comply with ACA requirements.
Other Republicans, including President Trump, have championed insurance plans that do not offer all of the services required of ACA plans and are therefore cheaper. Conservatives have generally described those plans as a way for people to choose insurance that responds more directly to their needs.
Iowa is taking a somewhat different approach. The legislation will allow the Iowa Farm Bureau to team up with the state’s largest health insurer, Wellmark, to sell “health benefit plans,” which the law describes as distinct from health insurance plans.
Related: Idaho’s bid to skirt Obamacare rejected by Trump administration
Because the new plans will not be defined as “health insurance,” Reynolds says they will not be subject to a variety of state and federal insurance regulations. Her argument is likely to be challenged in court, however.
It’s not clear what types of plans will be offered through the new scheme, but it will likely replicate what the Farm Bureau was offering its members prior to the ACA. The organization had been offering Wellmark plans to farmers since 1969 but stopped selling them because the plans did not comply with Obamacare requirements.
Iowa experienced the highest increase in ACA premiums of any state between 2016 and 2017, with rates more than doubling for the average silver-level plan offered on the state marketplace.
According to the Iowa Insurance Commissioner, the majority of those who dropped out of the marketplace were higher-income people who did not qualify for ACA subsidies. Those are the people who are most likely to take advantage of the new health plans.
While there is still a critical mass of lower-income enrollees who will stay in the ACA marketplace because the subsidies they receive offset the price increases, the departure of unsubsidized consumers, particularly those who are healthy, could further rattle the ACA marketplace.