New Iowa Law Allows Controversial Health Plans - Articles

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Posted by: Jarod Word on Apr 4, 2018
Last week, Iowa Governor Kim Reynolds (R) signed into law a bill that allows Iowa Farm Bureau to collaborate with the state’s dominant insurer to sell “health benefit plans,” a strategy that contends that not all health plans are health insurance, reports The Washington Post. The law says such plans “sponsored by a nonprofit agricultural organization… shall be deemed not to be insurance” meaning they will not have to comply with federal requirements. 
 
The law has sparked debate over whether the strategy is a creative path to offer some residents an alternative to increasing prices in the insurance marketplace or a path to substandard coverage that will divide the healthy from the sick. Some feel that this bill is an aftereffect of Congress and the Trump administration’s declaration that Americans who flout the law’s individual insurance mandate will no longer be charged penalties. “If the ACA’s insurance rules can’t be repealed, then an alternative is to get people the option of escaping them,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation, a non-profit organization that focuses on major health care issues facing the nation. “Without the penalty, the door is wide open for plans like this.”
 
Iowa Insurance Commissioner Doug Ommen said that he is officially undecided about the new Farm Bureau law but that he sympathizes with the need for more-affordable coverage. As consumers have been “hammered” by the Affordable Care Act (ACA) rates, he said, enrollment in Iowa’s marketplace has tumbled from nearly 75,000 in 2016 to about 61,000 last fall to 46,000 last month. According to Ommen, the Farm Bureau modeled its idea after a similar arrangement sponsored by the Tennessee Farm Bureau, which began decades ago and has continued in the ACA era. The Obama administration never challenged it.
 
The Farm Bureau plan is the state’s second attempt to circumvent the ACA. Last year, the state’s insurance commissioner asked federal health officials to allow Iowa to take about $350 million in ACA money for 2018 and use it in different ways to help people pay for plans outside the marketplace. When the government had not given approval as last fall’s ACA enrollment season neared, Iowa withdrew the proposal.
 
In a bill-signing ceremony, the governor contended that Iowa’s individual insurance market had ample choices and “reasonable” premiums before the ACA left it “in collapse.” After urging Congress to “fix this problem,” Reynolds recounted Monday, she said “we are done waiting” and urged state lawmakers to find their own solution. “That is exactly what they did.”