How Iowa became an Obamacare horror story

But Iowa’s marketplace is arguably in the worst shape in the country at a time when Republicans are intent on dismantling Obamacare, creating further stress on the wobbly exchanges. And Trump’s decision to gut funding for outreach and marketing activities ahead of open enrollment is likely to have an outsize effect in a state in which many customers are certain to be confused by their options. How did Iowa get to this precarious point? Decisions in Washington and Des Moines certainly played a role, but critical choices by state regulators, insurers and other key players also contributed to the tumultuous climate. For many Iowans—as many as 72,000 could be affected by Medica’s rate increase—it means terrible options for obtaining medical care. It was always going to be difficult to build a viable individual insurance market in a predominantly rural state like Iowa. One big reason for that: Insurers have little bargaining power with major health care providers that they need to create viable networks for their customers. California, which has a thriving Obamacare marketplace, has more than four times as many residents per square mile than Iowa.But there were also crucial developments that further undermined Iowa’s marketplace from the outset. The state’s dominant insurer, Wellmark Blue Cross and Blue Shield, which controls about three quarters of the state’s market, decided not to sell plans on the Obamacare marketplace from the outset. There was just one other state nationwide, Mississippi, where the dominant Blue plan opted not to participate. State regulators also made a critical decision during the first open-enrollment season in 2013: They decided to allow plans that don’t meet the coverage requirements of the Affordable Care Act to remain in place. That became possible after the Obama administration, facing an intense backlash over canceled plans and the disastrous launch of HealthCare.gov, gave states the option of grandfathering in noncompliant plans. As of May, more than half of the state’s individual market—roughly 80,000 individuals—remained in noncompliant plans. Nationwide, that figure is closer to 10 percent, according to data crunched by Charles Gaba, who runs a blog that tracks Obamacare enrollment.That meant a huge chunk of potential customers didn’t shop for coverage on the fledgling marketplace because they already had plans. And since those Iowans were able to get coverage prior to Obamacare’s prohibition on discriminating against individuals with expensive medical conditions, it’s almost certain they’re disproportionately healthy. The end result: A much smaller and more costly population ended up enrolling through the marketplace.