Just two months ago, Medica, a Midwest-based, non-profit health insurance company, informed the Iowa Insurance Department of their plans to remain in the Iowa Marketplace to provide individual health insurance products for the upcoming coverage year. Medica would be the only remaining private insurer in the ACA Marketplace in the state of Iowa, after Aetna and Wellmark (Blue Cross Blue Shield) announced they were pulling their plans in 2018 in Iowa.
Rate Increase Announcement
Prior to announcing their intention to stay in the individual marketplace, Medica conducted a thorough evaluation of the Iowa market and proposed a staggering rate increase on average of 43.5 percent for the 2018 plan year. However, today Medica announced that Iowans who buy their own health insurance through the Marketplace exchange would see their rates increase nearly 57 percent next year, approximately 13 percent higher than their June estimate. The Iowa Insurance Division has not yet approved Medica’s rate hike.
Geoff Bartsh, Medica Vice President of Individual and Family Business stated: “we filed with the intent to provide access to insurance for all Iowans, whether they are farmers, small business owners or other individuals who need coverage.” Bartsh acknowledged that significant rate hikes, such as the proposed increase for 2018, are not sustainable, but necessary in order to offer plans in Iowa in 2018.
Uncertainty and Concern
Medica attributes the significant increase to the uncertainties that exist in the healthcare field and the pending legislative actions. Specifically, President Trump’s threat to withhold federal health care subsidies that are a key part of the Affordable Care Act, known as “cost-sharing reduction” subsidies, contributes to this uncertainty. These payments help insurers cover the costs of deductibles and co-pays for members with moderate income.
Many Iowans who will need to purchase insurance through the individual market in 2018 may choose to not purchase health coverage at all. We will continue to provide updates on the legislative actions relating to the healthcare field and the impact that has your practice and the clients you serve.