Even if workers' spouses or children are the ones who are sick, the workers may end up acting as caregivers, running out of paid leave and using Medicaid to provide their own coverage, Lilly said.

Related: Rising cancer rates among young adults: Why employers must prioritize preventive care

Lilly asked lawmakers at the hearing to think about protecting health plan participants with serious health care needs, not just holding down the coverage premiums.

Other witnesses at the hearing argued that the current version of the main public health program for moderate-income and high-income people under 65, the Affordable Care Act public exchange program, is a poor fit for people with chronic or serious health problems.

Angela Shields, chief executive officer of Tennessee Realtors, who appeared on behalf of the National Association of Realtors, talked about her group's efforts to offer an association health plan for state association members.

The AHP offered participants access to a much longer list of doctors and hospitals than any of the exchange plans available, Shields said.

"High deductibles and limited networks make the ACA plans unworkable for most NAR members," Shields said.

Marcie Strouse, a partner with Capitol Benefits Group, who appeared on behalf of the National Federation of Independent Business, said the only ACA exchange plans available in Iowa are health maintenance organization plans.

When workers try using ACA premium tax credit subsidies to try to buy individual coverage, they "are recognizing that they actually have less access to providers," Strouse said.

One reason small employers struggle to offer health coverage in Iowa is that workers need group coverage to get access to good provider networks, Strouse said.