How valuable is a health benefit plan that can’t be called an insurance policy? The law that Republican legislators passed and Reynolds signed allows Iowa Farm Bureau, in collaboration with Wellmark Blue Cross and Blue Shield, to sell Iowans “health benefit plans.” The law states that the health plan, “sponsored by a nonprofit agricultural organization . . . shall be deemed not to be insurance.”
So Governor Reynolds and her GOP co-conspirators are promoting a so-called health plan that can’t be labeled as insurance. Their plan can’t be regulated by either federal or state insurance regulators. Reynolds is trumpeting a return to the ugly past when insurance companies could reject customers with pre-existing conditions and limit coverage.
The Washington Post headline said, “Iowa tries an end run around the Affordable Care Act (ACA)…or a path to substandard coverage that will divide the healthy from the sick.”
Larry Levitt, a senior vice president at the Kaiser Family Foundation, describes the Iowa Republican Plan.
“If the ACA’s insurance rules can’t be repealed, then an alternative is to get people the option of escaping them,” Levitt said.
Health care experts have warned that this might be a money maker for Farm Bureau, but customers must beware.
“If you’re collecting premiums from people who don’t use health care services very much you can make money,” said Sabrina Corlette, a health policy research professor at Georgetown University. “It’s when you actually have to cover medical services that insurance becomes a less-profitable business.”
When Reynolds signed the law in April, the Des Moines Register reported there were few specifics available.
“For example, Wellmark and the Farm Bureau could resume denying coverage to applicants if they have pre-existing health problems, such as diabetes, high blood pressure or a history of cancer. Such denials have generally been banned since 2014 by Obamacare. The bill also would let Wellmark and the Farm Bureau delete some types of coverage, such as for maternity or mental health care, from the new coverage.” –DSM Register April 2, 2018.
In April Iowa Starting Line published a behind-the-scenes legislative look by Matt Chapman about the new law. Matt described it as a, “real plan of Wellmark and Farm Bureau, to take us back to the days of pre-existing conditions where bankruptcy is the norm for those with serious illnesses…they have accomplished a public relations stunt that will give unregulated junk insurance to young healthy Iowans at the expense of our most vulnerable citizens, while at the same time they are gaslighting us by claiming Farm Bureau and Wellmark are somehow a savior in this process.”
Four months later in July 2018, the DSM Register reported Iowans are still waiting for specifics.
“The new Iowa option, which Republicans and some Democrats in the Legislature pushed through before knowing many of the details, represents another attempt by GOP-controlled states to chip away at some of the federal rules imposed under the 2010 law championed by former President Barack Obama.”-DSM Register July 12, 2018
In June, the Trump Administration’s Labor Department changed the rules authorizing the expansion of association health plans (AHPs). Business associations have long demanded to have the ability of associations to band together in health plans.
However, there has been tremendous push back on this proposal by many business groups. CEO John Arensmeyer of the Small Business Majority warns that it will weaken the ACA and hurt many small businesses.
“While the new rule may make it easier for a select number of small businesses with younger and/or healthier employees to purchase association health plans that might be cheaper in other states, the tradeoff is that this will cause the insurance market for small businesses to split in two, leading to major spikes in premiums for small firms that remain in the small group market…What’s more, these multi-state plans will offer fewer consumer safeguards. In fact, they will not have to include protections for people with pre-existing conditions nor will they be required to cover things like maternity care because they will not be subject to certain rules established by the ACA,” said Arensmeyer.
Several other major business associations are warning their members. “Buyer beware of these plans.”
This may suggest that the Farm Bureau proposal may be in trouble as well. The Farm Bureau Plan is very similar to the association plans. When customers realize that their policy may be worthless for pre-existing conditions and limited coverage they may lose their enthusiasm.
Will Reynolds and the Iowa GOP be sorry they rushed into passing an unknown and risky health plan that can’t even be called insurance?
by Rick Smith