DES MOINES, Iowa — Nick Podhajsky plans to get married this year for an unusual reason: health insurance coverage.

The 44-year-old farmer had expected to tie the knot next year. But because Iowa’s individual health insurance market is in chaos—with competition disappearing and prices skyrocketing—his fiancee was potentially going to be left with no affordable coverage options for next year. So they’ve decided to hold the ceremony before the end of the year, allowing his bride-to-be to get coverage through his plan.


“Public policy I guess matters,” said Podhajsky, who grows corn, soybeans and grains on a 1,200-acre farm about an hour and a half northeast of Des Moines and voted for Donald Trump in the 2016 presidential election. “What they do under those big dome buildings,” he said, “has real implications for people.”

That’s a lesson tens of thousands of Iowans have learned over the past four years as the state’s individual health insurance market has imploded, with insurers fleeing the market because of big losses. With Obamacare’s fifth open-enrollment season kicking off on Nov. 1, the consequences are playing out across one of America’s most politically influential states as residents struggle to maintain coverage.

Just one insurer, Medica, is willing to sell Obamacare plans in Iowa for next year—and it plans to raise premiums by an average of more than 50 percent. Thousands of Iowans, particularly those who make too much money to qualify for financial assistance, are likely to find that monthly premiums for 2018 are less comparable to a cellphone bill and more like a mortgage payment. The Iowa Insurance Division predicts that the number of individuals enrolled in coverage will decrease by at least 25 percent next year.

“I think you’ll have a lot of people who just give up and fall out of the market,” said Tom Bowman, CEO of Davenport’s Community Health Care, a clinic that serves roughly 30,000 predominantly low-income individuals each year.

With its markets in crisis, Iowa was seeking an unprecedented waiver from the federal government that would allow it to implement an entirely new subsidy structure and protect insurers that attract particularly expensive customers from big losses. The goal was to reduce premiums and expand coverage options.

But with no answer from the Trump administration on whether the waiver would be approved, and open enrollment imminent, state officials announced on Monday that they’re pulling the waiver application.

“Obamacare is unaffordable, unsustainable and unworkable,” said Iowa Gov. Kim Reynolds at a news conference at the state Capitol announcing the decision. “Obamacare has driven out consumer choice and competition.”

Iowa is not alone in having a disastrous insurance marketplace. Arizona, North Carolina and Tennessee have had similarly dysfunctional exchanges, with paltry competition and soaring premiums. Nearly half the counties in America have just a single insurer willing to sell coverage on the Obamacare markets.

“Obamacare is finished. It’s dead. It’s gone,” Trump said last week. “There is no such thing as Obamacare anymore.”

But Iowa’s marketplace is arguably in the worst shape in the country at a time when Republicans are intent on dismantling Obamacare, creating further stress on the wobbly exchanges. And Trump’s decision to gut funding for outreach and marketing activities ahead of open enrollment is likely to have an outsize effect in a state in which many customers are certain to be confused by their options.

How did Iowa get to this precarious point? Decisions in Washington and Des Moines certainly played a role, but critical choices by state regulators, insurers and other key players also contributed to the tumultuous climate. For many Iowans—as many as 72,000 could be affected by Medica’s rate increase—it means terrible options for obtaining medical care.

And they’re furious.

“I cannot believe our politicians and government have put us in this situation,” said Vanessa Beauregard, a resident of Cedar Rapids, who is losing her coverage through Aetna and isn’t sure what she’ll be able to afford for next year. “It’s just not right when you’re not a deadbeat.”



***

It was always going to be difficult to build a viable individual insurance market in a predominantly rural state like Iowa. One big reason for that: Insurers have little bargaining power with major health care providers that they need to create viable networks for their customers. California, which has a thriving Obamacare marketplace, has more than four times as many residents per square mile than Iowa.

“It’s hard to build inexpensive networks when the only hospital within 30 miles has you over a barrel,” said Dave Anderson, a health insurance expert at Duke University who has written extensively about the Obamacare markets.

But there were also crucial developments that further undermined Iowa’s marketplace from the outset. The state’s dominant insurer, Wellmark Blue Cross and Blue Shield, which controls about three quarters of the state’s market, decided not to sell plans on the Obamacare marketplace from the outset. There was just one other state nationwide, Mississippi, where the dominant Blue plan opted not to participate.

“They were sitting on the healthy, profitable members in the state. They had no good reason to get on the exchange,” Anderson said. “The risk pool on the exchange was going to be a very sick risk pool.”

State regulators also made a critical decision during the first open-enrollment season in 2013: They decided to allow plans that don’t meet the coverage requirements of the Affordable Care Act to remain in place. That became possible after the Obama administration, facing an intense backlash over canceled plans and the disastrous launch of HealthCare.gov, gave states the option of grandfathering in noncompliant plans.

Iowa officials were far from alone in allowing plans that don’t meet Obamacare’s coverage requirements to stay on the market, but the implications were far more significant in the state. As of May, more than half of the state’s individual market—roughly 80,000 individuals—remained in noncompliant plans. Nationwide, that figure is closer to 10 percent, according to data crunched by Charles Gaba, who runs a blog that tracks Obamacare enrollment.

That meant a huge chunk of potential customers didn’t shop for coverage on the fledgling marketplace because they already had plans. And since those Iowans were able to get coverage prior to Obamacare’s prohibition on discriminating against individuals with expensive medical conditions, it’s almost certain they’re disproportionately healthy. The end result: A much smaller and more costly population ended up enrolling through the marketplace.

“There wasn’t a political will to make hard decisions or move people,” said Aaron Todd, chief strategy officer for the Iowa Primary Care Association, who previously was a top health care adviser to Democrats in the Iowa Senate. “They basically saw [keeping the noncompliant plans] as a relief valve.”

Nick Gerhart, who authorized the noncompliant plans to remain in the market as the state’s insurance commissioner at the time, disagrees that allowing them to remain in place has been a significant destabilizing factor for the marketplace. “Why would I stand in the way of people keeping their insurance? It was a viable option,” Gerhart said. “What does it look like if they’re in? The [premium] increases still would have been significant.”

There’s no easy explanation for why so many Iowans remained in noncompliant plans. But at least one factor was Wellmark’s decision not to participate in the marketplace, which meant many of its customers stayed put. “Wellmark’s got a good brand,” Gerhart said. “Traditionally, insurance is a sticky business.”

Wellmark’s absence from the marketplace left a void that was filled in part by CoOportunity Health, a startup nonprofit seeded with loan dollars under the ACA. The new entrant picked up about 26,000 members during the first year of open enrollment, roughly a third of the market. But that initial success was short-lived and illusory.

The members CoOportunity enrolled proved much sicker and more expensive than the insurer had anticipated. In less than a year, the nonprofit collapsed after hemorrhaging red ink, leaving behind millions in unpaid bills and thousands of customers scrambling to find new coverage.

Renee and Dan Welk were among the customers left stranded. The Des Moines couple, who have two pre-teen daughters, are both independently employed. Dan works as a photographer; Renee as a consultant for a company that sells health and beauty products.

After CoOportunity collapsed, they were able to find a comparable plan from Aetna, which currently costs them about $400 per month. But now Aetna is leaving the market too. While it’s uncertain exactly what their options will be for next year, the couple anticipates that coverage for their family under a Medica plan is likely to cost well over $1,000 per month.

Instead, they’re looking at the possibility of enrolling in a health care sharing ministry in which members pool resources to cover medical costs. Those faith-based plans aren’t insurance, and there’s no guarantee they’ll cover the medical bills of members who get sick. But they’re becoming an increasingly popular, low-cost option in states like Iowa with dysfunctional marketplaces. It’s also a way to dodge Obamacare’s tax penalty for failing to obtain coverage since members of health care sharing ministries were granted an exemption under the law. The companies that operate health care sharing ministries now claim to have more than 1 million members nationwide.

“I don’t feel like it’s any bigger of a risk than giving your money to an insurance company that you may get kicked off of for any reason,” Renee said. “I really don’t feel like it’s a bigger risk.”

CoOportunity turned out to be the canary in the co-op coal mine. In the ensuing three years, 19 of the 23 nonprofit startup plans across the country, seeded with more than $2 billion in loans, collapsed after piling up huge financial losses. Gerhart, a Republican appointee, blames the disastrous performance in part to a lack of effective oversight from federal officials at the Center for Medicare & Medicaid Services.

“Effectively you’re running a venture capital firm out of CMS with nobody who understands insurance,” he said.

After three years on the sidelines, Wellmark finally entered Iowa’s exchange this year. It didn’t go well. Company officials attributed its troubles in part to a single patient who was costing the company $1 million a month in claims. A company executive revealed in a speech to the Des Moines Rotary Club earlier this year that the customer in question was a 17-year-old boy with hemophilia.

In April, Wellmark announced it would no longer sell Obamacare plans on or off the exchange market, citing unsustainable losses of $90 million. That means 21,400 individuals will need to find new coverage for next year. Two other insurers—Aetna and Gundersen Health Plan—quickly announced they were also dropping out for 2018.

The last remaining insurer, Medica, threatened to pull out of the market too, potentially leaving the entire state with no insurer willing to sell plans in the individual market. Medica ultimately decided to offer coverage in all 99 counties—but with average premium increases of 57 percent.

Some Iowans place much of the blame on Wellmark for the current marketplace mess. Despite its grumblings about unsustainable losses, the company’s most recent financial statement show it ran a profit of $20 million through the first six months of this year on its Iowa operations. Last year, it had profits of $5.5 million. In 2015, however, it lost $9.4 million.

“Wellmark is the dark side of this debate,” said Jack Hatch, the 2014 Democratic nominee for governor, who worked extensively on health care issues during his two decades in the Iowa Legislature. “They are the Darth Vader of health care reform in this state.”

Wellmark didn’t respond to multiple phone calls seeking comment for this story, but others scoff at such assertions, arguing that Wellmark CEO John Forsyth was simply taking a financially prudent path through a time of great uncertainty in the health insurance industry. Insurers lost an estimated $10 billion on their individual market business in 2014 and 2015, according to an analysis by McKinsey.

“In hindsight, it was probably the right decision for them, their members and their reserves,” said Gerhart. “He probably saved their company several hundred million dollars.”



***

Jack Cooper is a 60-year-old bachelor farmer in Toledo, Iowa, a rural town of 2,200 people located in the windswept fields between Ames and Cedar Rapids. Five years ago, he had two artificial heart valves installed that he knows will need to be replaced in the coming years, and he had one cancerous kidney removed. Cooper currently pays about $1,000 per month for a Wellmark plan.

“That’s kind of tough, especially on a small farm,” Cooper said. “I can just barely come up with that.”

Cooper recently received a cancellation notice from Wellmark. With the company exiting the individual market, he isn’t sure what his options will be for next year, but is worried he will no longer be able to afford coverage.

“We got kind of busy with harvest,” Cooper said. “When we get done with harvest I’ll have to start talking to people and figure out what to do.”

But the corn, soybean and cattle farmer doesn’t blame Trump for his current predicament. He blames Barack Obama. “I think that n----- that was in the White House screwed everything up,” Cooper said.

Over the course of my reporting, I didn’t hear that kind of racist sentiment from other Iowans, but the uncertainty Cooper faces is pervasive throughout the state. Nobody knows exactly what to expect when open enrollment begins on Nov. 1.

That uncertainty is compounded by the continuing disarray in Washington over how to deal with Obamacare. Congressional Republicans have repeatedly failed in their efforts to repeal and replace the law, and the prospects for passing a bipartisan package to stabilize the markets appear grim.

“It’s really truly amazing that we could have this much uncertainty at any given time,” said Doug Cropper, CEO of Genesis Health System, which operates in the Quad Cities region. “It’s just very, very unique in my 36-year career.”

At the same time, the Trump administration has taken steps that have further destabilized the wobbly markets. Earlier this month, the White House announced that it’s cutting off subsidy payments that insurers rely on to reduce out-of-pocket costs for their poorest Obamacare customers. That means insurers are jacking up premiums by an additional 15 percent or more to account for the funding shortfall.

In addition, the Trump administration slashed funding for ACA marketing by 90 percent, and reduced grants to organizations that help people sign up for coverage by 40 percent. In Iowa, the cuts were even steeper: Two of the three organizations that received grants last year saw their funding cut by more than 80 percent.

Planned Parenthood of the Heartland saw its grant reduced from $304,000 to just $45,000. The group turned down the money—and laid off six outreach workers—after concluding that it wasn’t enough to cover even one full-time salary.

Karen Wielert has been helping Iowans sign up for coverage since the chaotic first open-enrollment season, but she was among the outreach workers let go by Planned Parenthood. She’s now trying to piece together some funding so she can at least make enough money to keep helping people enroll in coverage through the open-enrollment season that closes on Dec. 15.

“I’ve got a lot of families that I’ve worked with and built relationships with,” Wielert said, speaking on her last day of employment with Planned Parenthood. “I don’t know what to expect Nov. 1, honestly. It’s going to be a challenging process, to say the least.”



***

Who will likely be left in Iowa’s individual insurance market? Low-income Iowans who qualify for generous subsidies and are largely shielded from skyrocketing premiums, and very sick people who are desperate to maintain coverage. The end result: a smaller, sicker, more expensive risk pool.

Many more individuals are likely to become uninsured. But that doesn’t mean they won’t continue to seek—and receive—medical care. They’ll just be more likely to show up in the emergency room instead of a doctor’s office.

“Who is going to be left having to come up with a solution? It’s really not the insurance companies,” said Sabra Rosener, vice president of government and external affairs for UnityPoint Health, one of Iowa’s largest hospital systems. “We don’t get to decide to disengage. We don’t get to take our ball and go home, so to speak. Because we’re here, and they’ll come regardless of what their plan is or is not.”

The chaotic situation in Iowa could have political ramifications for 2018 and beyond. Trump has blamed the troubled Obamacare markets on Democrats, but polling data suggest the public will overwhelmingly fault Republicans for future problems. That could spell trouble for candidates on the ballot next year, including Gov. Reynolds and Reps. Rod Blum and David Young, who are top Democratic targets.

“They either have to decide they’re going to go after Trump for roiling the Iowa market or they have to stand by him,” said Jeff Link, a veteran Democratic strategist in the state, speaking of Blum and Young. “Neither one of them is really taking a position yet, but ultimately they’re going to be asked that question and that’s going to be an awkward answer.”