Iowa's only remaining Obamacare insurer seeks another big rate hike

Iowans who buy their own health insurance through the Affordable Care Act exchange would see their rates increase nearly 57 percent next year under a revised rate proposed Wednesday.

The proposal is 13 percentage points higher than previously was estimated by Medica, the one remaining carrier selling individual policies in Iowa next year.

Medica attributed the additional increase to uncertainties over federal health care subsidies, the insurer said in a release.

President Donald Trump has threatened to stop payments from an important part of Obamacare known as the “cost-sharing reduction.”

The $7 billion annual payments help insurers cover the costs of deductibles and co-pays for members with moderate income. The subsidies can cut deductibles that would otherwise be thousands of dollars to a few hundred dollars.

In Iowa, the payments assist 24,500 of the 72,000 people who buy individual insurance.

“We remain hopeful the federal government will fund the cost-sharing reductions, but we are working with the Iowa Insurance Division to help consumers understand the implications of lack of this funding,” Geoff Bartsh, Medica vice president of individual and family business, said in a statement. “We regret the disruption this creates for consumers.”

A Congressional Budget Office report released Monday showed cutting the payments nationally would add $194 billion to federal deficits over a decade.

That’s because they would automatically increase a different Obamacare subsidy as premiums jump, more than wiping out any savings, according to the CBO.

Iowans who buy individual insurance were on the cusp of losing all options after two large carriers, Aetna and Wellmark, announced in April that they would stop selling such policies here next year.

But Medica, a small carrier based in Minnesota, said in June that it intended to continue selling individual insurance in Iowa.

Obamacare divided the individual insurance market into two markets: subsidized and unsubsidized.

State Insurance Commissioner Doug Ommen said Wednesday that many middle-class Iowans will choose to forgo health insurance rather than pay the "extraordinarily high premiums."

"While those that are subsidized may not feel the full impact of this additional increase as their contribution is capped based on a percentage of their income," Ommen said, "those middle-class Iowans who do not receive federal subsidies and are paying the full premium cost out-of-pocket are forced to make very difficult choices."

The Iowa Insurance Division will review the proposal before Nov. 1, when 2018 enrollment begins.

The Insurance Division must approve the rate hike before Medica could put it into effect.