When the Affordable Care Act was signed in 2013, the health insurance marketplace was created in an effort to provide competition and lower rates. Since then, the number of claims has sharply increased, creating greater cost for insurance companies. As a direct result, many of the largest insurance providers are hesitant to provide coverage to people via the marketplace. Medica, an insurance company based in Minnesota, is currently the only health insurance provider offering service to all of Iowa’s 99 counties. There are 13 counties in Iowa that will have Medica as their only option on the marketplace, the majority of which are in southeast Iowa. This includes Iowa, Jefferson, Keokuk, and Louisa Counties. Additionally, there will only be two marketplace options for Washington, Johnson, and Henry County residents.
Iowa Insurance Commissioner Nick Gerhart says while Medica will be the sole marketplace provider in these counties, residents will have several plans to choose from. Many who utilize it will also qualify for government subsidies, which is based on household income. Gerhart indicated they knew the cost for providing affordable insurance would be extraordinarily high at first, and they hoped as people got healthier, it would regress back to the mean. However, he explains that hasn’t been the case, saying, “I think, unfortunately, what’s happening is a much more chronic pool of individuals have purchased these plans than the carriers had priced for, because they have not seen even a plateauing of claims yet. That was my premise two or three years ago, and it just hasn’t proven out yet.”
Wellmark has not participated in the marketplace in years past, but has decided to enter in a limited capacity in 2017. It will provide insurance via the marketplace for 40 counties, including Johnson County. Washington County Public Health Administrator Danielle Pettit-Majewski said, “I understand Wellmark wanting to be cautious as they enter into the marketplace system, because we have seen United Health Care pull out because of the costs. We have seen insurance premiums go up because of the high utilization.” She added, “When you are offering insurance to people who may not have had an opportunity to have insurance before, you often see people utilizing it.”
Gerhart added there are still kinks in the Affordable Care system, and they will continue working on it at a federal level to make it more cost effective. One bit of peace of mind the counties with only one option can take is that Medica is a non-profit company. Gerhart believes the likelihood is very low of them capitalizing on their role of sole provider and hiking up insurance costs. For more information regarding the health insurance marketplace, listen to the In Touch with Southeast Iowa interviews with Gerhart and Pettit-Majewski.