Iowa’s stopgap health insurance plan is illegal, say critics

Opponents to the state commissioner’s plan say it would excessively burden moderate income Iowans.

Iowa has been considering a stopgap health insurance proposal to help the state to prop up its shaky coverage market. However, critics are saying that this strategy would violate federal law.

The reason is that they claim it would force moderate income Iowans to have to spend far more for coverage.

In fact, opponents say those state residents could be forced to pay thousands more every year if the stopgap health insurance strategy was to move forward. Should the proposal face challenges in court, it could be derailed if it does receive approval from federal officials, say some legal experts. Iowa’s insurance commissioner, Doug Ommen, proposed this plan back in June. His goal was to generate a sizeable reduction in the premiums Iowans would have to pay in 2018.

Approximately 72,000 Iowans would be affected by this reduction in health insurance rates charged over the state exchange.

However, some question whether the stopgap health insurance plan would only harm others as it helped some.

Iowa stopgap health insurance planCritics say the proposal is in direct violation of the Affordable Care Act. The reason is that while it may reduce the premiums paid by Iowans in lower income households, moderate income households would have to pick up the slack.

The reason is that the strategy would redirect around $48 million in federal funds. That money is currently used to assist state residents to pay for their health care costs, such as co-pays and deductibles. Without that added help to make their medical services and prescription medications more affordable, Iowans in certain income ranges could end up paying thousands of dollars more to cover their health care, say critics.

The stopgap health insurance plan, say critics, would not assist consumers in the moderate income group because they already benefit from federal subsidies to cover their premiums. Therefore the extra costs they pay for health care would be in areas not supported by the proposed plan. “The courts won’t stand for this,” said Nicholas Bagley, a health care law expert, in a piece he wrote for “Incidental Economist” last week.

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