Republicans couldn't repeal the Affordable Care Act, so in Iowa, they're redefining insurance. And it's bad news for people who get sick.
As President Donald Trump and his cohorts scramble to figure out how to deliver on campaign promises to undermine the Affordable Care Act, commonly referred to as Obamacare, Iowa's Farm Bureau is now offering health care plans that aren't subject to the ACA's regulations. Iowa's Republican Governor Kim Reynolds signed the new legislation into law last Monday, which deems that the plans offered by the Farm Bureau "shall not be deemed to be insurance."
While many of these plans, which are sold by Wellmark, an affiliate of Anthem Blue Cross Blue Shield, are cheap, they don't offer consumers much in the way of coverage. In other words, people with chronic conditions will be left with fewer, and more expensive options. "We do know that this may not be a solution for all," a Farm Bureau spokesperson conceded.
A likely consequence of this law will be insurers, like Wellmark and the Farm Bureau, charging people who need continuing care higher premiums. Under the guidelines of the ACA, pre-existing conditions can't be used to charge higher premiums. Republicans like to claim that the ACA has driven healthy people out of the insurance market, however, the State of Iowa has so far done little to promote enrollment in plans offered by Healthcare.gov. Only 20 percent of Iowans eligible to receive subsidized insurance signed up as of 2016. Many of these plans are available at little to no charge to people living below the poverty line.
The other challenge facing Iowans is the inevitable phase out of grandfathered plans, which kept premiums low allowing non-compliant plans to continue. Healthy Iowans may find solace in the now-available cheaper plans, but people with pre-existing conditions, or those who are healthy and then get sick, may find themselves unable to afford medical care, or stuck with bills that ACA-compliant policies would have covered.
States like Alaska and Minnesota, however, have taken a different approach. They have promoted enrollment in subsidized plans through Healtcare.gov, and even created "re-insurance pools" for individuals who needed to purchase ACA-compliant plans. These pools also helped insurers recoup some of the costs of taking care of sick patients. As a result, premiums fell in both states. Officials in Wisconsin have expressed their interest in trying a similar approach.
Other ideas, like a buy-in program to Medicaid, have been floated as well. But this would require an increase in government spending, which for Republicans, is a non-starter. Their approach, which is the entire premise of Trumpcare, is to offer cheaper plans with fewer benefits in the event medical care is needed.
Iowa has begun to do more to promote enrollment in Healthcare.gov plans. But the insurance policies being offered by the Farm Bureau will only save money in the short term. People who have experienced an emergency or a serious medical issue understand that you're healthy until you're not. These new policies many lower monthly premiums, but when the time comes that medical care is required, Iowans may find themselves responsible for exorbitant costs not covered by insurance.