Last Major Obamacare Insurer to Remain in Iowa, at a Steep PriceBy and
Medica proposes 43.5 percent rate increase for 2018 ACA plans
Insurer calls such increases ‘not sustainable long term’
Medica, the last remaining Obamacare insurer in much of Iowa, is asking the state to let it sharply raise customers’ premiums next year.
The insurer said Monday that it would raise rates for individual Obamacare plans by 43.5 percent next year. The rates have to be approved by the state, which has seen several health plans exit the program, leaving Medica as the sole Obamacare insurer in most places.
“Rate increases of 43 percent are not sustainable long term,” Geoff Bartsh, Medica’s vice president of individual and family business, said in an emailed statement. “We know this will impact people who do not currently receive a subsidy particularly hard. The bottom line is that the individual market still needs reform. We will continue to work with federal and state officials to provide the certainty and stability needed for markets to succeed long term.”
The rate increases have become political fodder as Republicans work to repeal large parts of the Affordable Care Act. They’ve cited the high premiums and insurers pulling out as proof the program isn’t working, while insurers have recently said they need stability and support from the government to continue in the program next year.
“We are concerned that Iowa has hit a point within our market’s collapse that a 43 percent rate increase will drive healthier, younger, and middle aged individuals out of the market,” Iowa Insurance Commissioner Doug Ommen said in an emailed statement. “Iowa’s individual market remains unsustainable and needs a fix from Congress.”
The state has asked the Trump administration to let it reallocate millions of dollars and create a stopgap program for about 72,000 people in the state on ACA plans. The proposal would create a single, standardized plan that all insurers in the state would offer.
Medica last month said it might exit Iowa if it didn’t get help from state or federal officials. The large rate increases, if approved, may give it a measure of stability as it increases the premiums it takes in. Some consumers get tax subsidies under the ACA that cushion the impact of increases.
Iowa’s Affordable Care Act market has rapidly deteriorated, with two of its four insurers, Wellmark Inc. and Aetna Inc., already saying they won’t return next year. Medica is a unit of Medica Holding Co., a non-profit company based in Minnesota.