The Iowa state insurance commissioner is urging carriers to get into the exchange while there are still lots of potential policyholders.
Almost two months ago, when National Underwriter Life & Health checked in with Commissioner Nick Gerhart, Medicaid expansion was still in a rough and tumble period in the state legislature and no health insurance carriers had yet signed up for the federally-run but state-partnered health insurance exchange.
Now, a version of the Medicaid expansion will go forward in a version of the so-called Arkansas Compromise after Democrats and Republicans brokered a deal and the Republican Gov. Terry Branstad agreed to it. The Associated Press reported that Branstad will this week sign legislation that expands the Medicaid health care program in Iowa. Under the deal, those above the poverty line at 101 percent but below 138 percent will be given silver plans on the exchange.
However, Gerhart has seen only one carrier — and not even the first- or second-largest — sign up for the partnership exchange.
Gerhart did not disclose the name of the insurer.
Notice of intention to join the exchange for the first open enrollment period beginning Oct. 1 is due June 30.
But as he was back in April, Gerhart says he is trying to do everything he can as insurance commissioner to make the offerings as robust as possible.
Gerhart hopes to get the two largest insurers on board, and also try and convince the Office of Personnel Management (OPM) to get a multistate plan in Iowa for next year, not a few years down the road.
He brings the perspective of a son of a primary care physician and a member of a family of a multigenerational farm ownership — his family’s ownership dates back to the 1840s — and has not been a money-maker, he stresses.
“A sense of urgency has come back to the exchange,” Gerhart said.
There is a statewide capacity issue of the biggest carrier is not on the exchange,” Gerhart added.
“It is great that you want to be there year two or three but we really need partners in year one,” Gerhart said. The carriers recruited in without the big networks won’t have the doctor network or experience with the population flow, although they might cover the state, Gerhart worries.
“If Wellmark [Blue Cross and Blue Shield] and United Healthcare Group had made a firm commitment, and said we will be there,” that would be one thing, Gerhart said, referring to the two largest health insurers in the state. News reports give Wellmark 86 percent of the individual market in the state.
But without them, Gerhart has been beseeching OPM and the Centers for Medicare and Medicaid Services (CMS). If there is a list of which states get a multistate plan first, Gerhart said he wants Iowa to be on it.
According to the latest conversation this week with OPM, he has not gotten a sense that Iowa will get there in 2014.
Gerhart said he has been trying hard to bring in OPM despite the sense that a lot of other state regulators don’t want to cede control to OPM, reflecting the same dynamic these states have with the U.S. Department of Health and Human Services (HHS).
Gov. Branstad, who before rejected Medicaid expansion and other trappings of the Patient Protection and Affordable Care Act (PPACA) is now striving to make Iowa “the healthiest state” with a message-branded initiative.
“My view is, I want to make sure for year one, I want to make sure we have options. We may have that debate later over jurisdictional issues,” Gerhart said.
However, he worries that OPM has been so focused on more densely populated states.
Under PPACA, with respect to the first year of multistate plans, an issuer must offer the plan in at least 60 percent of states. There is then a year-long ramp up to 70 percent, then 85 percent and finally all jurisdictions.
Of the two largest insurers who have not yet signed on to the exchange, Wellmark said it is preparing for all state and federal filing deadlines and will expect to have a public announcement closer to the filing dates. United said that it continues to evaluate exchanges and sees 2014 as just the very start of the exchange markets.
However, Wellmark, just this week, said it will limit premiums increases in 2014 to less than 6 percent for individual and small-business policyholders, according to an AP article. Wellmark did not comment on the article.
“We will continue ongoing discussions with our provider partners and customers to continually review future exchange opportunities,” United said in a statement.
“As the economics, sustainability and dynamics of the exchange continue to become clearer over time, the exchange has the potential to be a growth market with much to offer UnitedHealthcare, other insurers and consumers,” its regional spokesman added.
Given what United has said in the past, “I am not surprised that United Health Group is not already joining the exchange,” Gerhart said, but “if the Blues don’t come out, I am a bit surprised, given the Healthy Iowa plan. It’s a pretty good plan for insurers to come in to a ready-made market, a pretty good market. It’s a head-scratcher that the biggest companies don’t come in,” he added.
“People should have the choice,” Gerhart said. “That is my position.”
But it seems to him, he said, that a lot of companies are gambling that a lot of these people in the individual market won’t qualify for a tax credit.
Knowing what he knows about the economics in the farming community, where adjusted gross income can get ‘way down,’ he thinks those families will.
And he wants them to know that.
To make sure people know they have choices or at least start asking questions to lead them there, he is requiring insurers to inform policyholders — twice, at the bare minimum.
“Quite frankly, I do believe people should be able to pick what is right for their family,” Gerhart said.
Before the end of the year, and before open enrollment, insurers in Iowa must tell policyholders what their rate will be if they continue with what they have, and that they may or may not qualify for tax credit, so they can make a fully-informed decision.
“Carriers said, ‘you can’t do that.’ I said, ‘Well, I am going to do it,’” Gerhart said.
Around December, insurers will disclose again in a second notice informing policyholders of their ability to renew their plan so long as they know their options — that there’s an exchange and they may qualify for tax credits.
“It’s basic consumer protection,” Gerhart said.
Gerhart said it is best to get in now, while the getting’s good.
“I think that [carriers who make an] early entrance into those markets have a leg up,” he said.