Iowa seeks to allow insurers to skirt ObamaCare rules

Iowa seeks to allow insurers to skirt ObamaCare rules

Iowa’s governor is poised to sign legislation that would allow insurers to sell cheaper plans that don’t comply with certain ObamaCare consumer protection regulations.

According to the Des Moines Register, the state Senate approved the bill Tuesday, and Gov. Kim Reynolds (R) is expected to sign it.

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The bill combines two separate proposals. One would allow small businesses or self-employed individuals to band together to buy coverage through “association health plans” (AHPs) that don’t meet ObamaCare insurer rules.  

Proponents of association plans say they are cheaper alternatives for small employers or the self-employed. The Trump administration has already proposed expanding association health plans on a national level.

But health experts have warned that the proposal could cause an upheaval in ObamaCare’s insurance markets because the AHPs would likely cherry-pick only young, healthy people.

Another would allow the Iowa Farm Bureau to partner with Wellmark Blue Cross and Blue Shield to offer “benefit plans.” The plans would not be considered health insurance, and so would not be subject to state or federal insurance regulations.

Those ObamaCare benefits include maternity care, mental health, substance abuse treatment and requiring insurers to cover people with pre-existing conditions and not charge them more.

Critics of ObamaCare say the regulations drive up costs, and that allowing people to purchase plans that don’t meet the law’s requirements allows more freedom of choice. Iowa’s ObamaCare exchange struggled last year. It has one of the lowest enrollment rates in the country, since all but one insurer defected.

The state’s lone insurer, Medica, asked for a 57-percent rate hike for next year. However, Wellmark agreed to return to the exchange in 2018.

Opponents of the legislation say it will drive up costs for older people with pre-existing conditions, undermine ObamaCare and destabilize the state’s shaky health insurance market.

It’s not clear if the Trump administration will allow Iowa’s legislation to move forward. Earlier this month, the Centers for Medicare and Medicaid Services rejected as illegal a request from Idaho to allow Blue Cross to sell plans that don’t meet ObamaCare requirements.