Iowa Individual Health Insurance Market

1. Iowa Individual Health Insurance Market

2. Iowa’s Pre-ACA Individual Market • Multiple carriers and stable market • Had one of the lowest uninsured rates in country –but individual comprehensive health insurance plans were unaffordable for some modest income earners. • State high-risk pool (HIPIOWA) for individuals with persistent, high cost health conditions –but the rates were unaffordable for some.

3. Iowa’s Total Health Coverage Total Iowa Population 3,046,355 100% Employer-based 1,614,568 53% Non-employer-based 243,708 8% Medicaid 517,880 17% Medicare 456,953 15% Other Public 30,464 1% Uninsured 152,318 5% Source: Kaiser Family Foundation 2015 Data

4. Federal Law • Medicaid Expansion • Grandfathered Plans • Transitional [Grandmother] Plans • ACA Compliant Plans

5. Grandfathered Plans

6. Transition Plans

7. ACA-Compliant Plans

8. Condition # 1: “High Risk” concentration • People with pre-existing persistent health conditions entered individual pool • 2016 5% of 74,904 = 3,745 people • 70% of claims

9. Condition # 2: Disconnected Rate = Risk • ACA subsidies are contribution caps fixed to income level. • ACA subsidies offer 100% insulation from skyrocketing rates for modest income earners and 0% insulation for many middle income earners. • Insurers have huge incentive to simply double rates. (2017) $197MM  $420MM (2018)

10. Uncapped tax credit subsidies for <400% FPL • Individual % of income cap for < $48,000 income • Example: • Year 1 Year 2 Year 3 • Individual’s total annual premium $4,000 $8,000 $12,000 Individual Cap - $4,640 $4,640 $ 4,640 • Balance bill taxpayers [APTC]- $ 0 $3,360 $ 7,360

11. Insurance Rate - Family Income Cliff55 year-old couple • Age Income %FPL 2nd Low SilverMax % Inc Max Max Annual % of • (Reg 6) /mo ACA Monthly Annual APTCIncome _____________________________________________________________________________________________ • $32,317 199% $2724 6.38% $172 $2062 $30,627 6.38% • $64,798 399% $2724 9.69% $523 $6279 $26,410 9.69% • ______________________________________________________________________________________________ 55 $66,746 411% $2724 N/A $2724 $32,689 $0 49%

12. Insurance Rate – Family Income Cliff28 year-old couple w/ twins age 4 • Age Income %FPL 2nd Low SilverMax % Inc Max Max Annual % of • (Reg 6) /mo ACA Monthly Annual APTCIncome _____________________________________________________________________________________________ • 28+4 $48,954199% $2262 6.38% $260 $3123 $24,025 6.38% • 28+4 $98,154399% $2262 9.69% $793 $9511 $17,637 9.69% • ______________________________________________________________________________________________ 28+4 $101,106 411% $2262 N/A $2262 $27,148 $0 27%

13. Condition # 3: Adverse Selection • ACA subsidy and 3:1 age banding structures – Since 2015 – have disadvantaged younger healthy populations. • 2018 rates are now demoralizing for middle-aged middle class.

14. Youth and its Subsidy Disadvantage <400% FPL • Age Income %FPL 2nd Low SilverMax % Inc Max Max Annual % of • (Reg 6) /mo. ACA Monthly Annual APTCIncome _____________________________________________________________________________________________ • 28 $32,317 199% $1328 6.38% $172 $2062 $13,872 6.38% • $32,317 199% $3510 6.38% $172 $2062 $40,053 6.38% • ______________________________________________________________________________________________ • $64,798 399% $1328 9.69% $523 $6279 $ 9655 9.69% • 62 $64,798 399% $3510 9.69% $523 $6279 $35,836 9.69%

15. Condition # 4: Non-viable Risk Pool • Easy-to-game “special” enrollment • Need continuous coverage incentives - year-to-year

16. Condition # 5: Rule Uncertainty • Congress • President • Supreme Court

17. Unaffordable for Thousands and Unsustainable as a Voluntary Market • 2018 • 80% federal dollars

19. Iowans with businesses may be able to join the small group market • Short-term, disability or specified disease policies may not cover pre-existing conditions • Talk to tax advisor about whether you may be exempt from the ACA individual mandate in 2018 (ACA premium must be more than 8.05% of income) • Health-sharing ministries are not insurance and consumers should carefully read all materials before deciding to participate. Talk to a Licensed Agent What are the Options in 2018? Talk to a Licensed Agent

20. State • Farm Bureau Bill • MEWA Bill • Direct Primary Care Agreements Bill • Federal • MEWA/Association Proposed Rule • Short-term Limited Duration Proposed Rule These are proposed solutions for those individuals who are not eligible for ACA subsidies; these proposals do not address the structural issues with the ACA State & Federal Proposals

21. www.iid.iowa.gov Questions or comments?