By Isabella Senno
The federal Centers for Medicare and Medicaid Services, which regulate the Obamacare individual market, issued a rule on April 13 meant to increase consumer choices and market stability for providers.
The rule follows a week in which insurance companies Aetna and Wellmark announced that in 2018 they will stop selling individual insurance policies on Iowa’s health-care exchange. This shift in providers means approximately 58,000 Iowans could be left without insurance in about nine months.
Peter Damiano, the director of the University of Iowa Public Policy Center, said Iowa’s individual market was created under the Affordable Care Act in 2014, and it has mainly been meant for those who either did not or could not receive coverage through alternative sources, such as an employer.
Aetna and Wellmark have contended that rising financial risk and market uncertainty are their reasons for leaving the individual healthcare exchange. This is an argument that could lead to further future instability, Damiano said.
“The problem with the argument saying the individual market is broken now is that it was broken before the Affordable Care Act started,” he said. “If they don’t enforce the individual mandate, meaning everybody has to have insurance, then it really will be down to just the sicker people who buy it and the risk pool is going to get worse.”
Scott McIntyre, the vice president for communications at the Iowa Hospital Association, said this increased instability could leave hospitals across the state in the lurch.
“Just because people are uninsured doesn’t mean they don’t need health care, and they will come to the hospital seeking care one way or another,” McIntyre said. “Our hospitals have always dealt with uninsured people who either have no capability or limited capability to pay for their health care …”
Two major issues with uncompensated or “charity” care McIntyre points to are that uninsured individuals tend to not have regular relationships with health-care providers and tend to be treated in expensive emergency departments.
McIntyre said within one year of the ACA taking full effect, charity care for Iowa hospitals fell by a combined cost of $127 million, 38 percent. With the individual-insurance market experiencing losses, uncompensated care may see a resurgence, leading to problems for hospitals and for other patients.
“Charity care, one way or another, is paid for, if not completely at least partially, by people who are insured privately … so those losses [from individual insurance] are passed along … by the hospitals in order to be financially viable,” McIntyre said. “Truly, if the impact is great enough, hospitals might freeze hiring, hospitals might not update technology or other advancements for their facility, hospitals might not do community services like free immunizations or free counseling.”
With Aetna and Wellmark gone, the individual insurance market in Iowa is now down to two providers, Medica and Gunderson Health Plan. This leaves extremely limited options for individual consumers, according to the latest data from the Iowa Insurance Division, Medica, which is the only company remaining to sell individual policies statewide.
The company must make a decision by mid-June about whether it will continue to offer plans in 2018.
“We haven’t made any decisions at this point, so there’s really not more to say other than we’re evaluating our options and the situation,” said Greg Bury, the senior manager of public relations for Medica.