Iowa Gov. Kim Reynolds said Monday that state officials were officially withdrawing a waiver to overhaul Obamacare in the state, blaming the outcome on the healthcare law’s lack of flexibility.
Reynolds, a Republican, said she was “extremely disappointed” about the result, calling Obamacare “unworkable” for what Iowa health officials proposed.
“We need Congress to repeal and replace,” she said at a press conference, noting that the Obamacare waiver process, known as the 1332 or innovation waiver, was too inflexible for what they were proposing.
The pathway to approval for the waiver was always uncertain because Iowa did not follow specific requirements through Obamacare. For instance, the waivers are supposed to be passed through the state legislature, but Iowa allowed the state’s insurance division to come up with the measure, along with the help of insurer Wellmark Blue Cross and Blue Shield. Doug Ommen, Iowa’s health insurance commissioner, also called the law’s waiver provisions “inflexible” and “unworkable,” and he acknowledged that Iowa’s approach was different from other states. He argued that rates for premiums were too high under the current system, saying that having only one insurer offer coverage to most state residents created a monopoly that also resulted in too much spending by the federal government to keep the exchange alive.
“Obamacare does give states very little flexibility, certainly flexibility to innovate, which is what is at stake here,” Ommen said at the press conference.
President Trump reportedly told the Department of Health and Human Services to halt the Iowa waiver, after the state worked for months with top officials. Ommen and Reynolds did not blame the Trump administration for the result, but thanked officials, saying that Obamacare was the problem. Reynolds said she discussed the waiver with Trump in a phone call last week and said he had given authority to Seema Verma, administrator for the Centers for Medicare and Medicaid Services, to work with the state in crafting the details of the plan. The idea was always intended to be a short-term fix, she said.
Iowa’s waiver would restructure Obamacare’s tax credits available to people in the exchange, making a single, standard plan available to every eligible customer, instead of tiered levels, and would have a flat credit to help anyone who enrolls pay for his or her premiums, based on age and income.
Under the plan, Iowa also would create a reinsurance program, which would take funding from federal tax credits for premiums and cost-sharing reduction subsidies that go to out-of-pocket costs, and put the money toward the claims of more costly enrollees.
Minnesota-based Medica is the only insurer that has committed to selling plans on the exchange in Iowa, but Wellmark had said it would return if the short-term solution were approved and would sell plans in all 99 of Iowa’s counties.
