Nebraskans facing high health insurance premiums may see a way to lower prices if they look to the east.
Iowa is moving ahead with “health benefit plans” that have fewer benefits; that reject some people with pre-existing medical conditions; and that cost less than health insurance that meets the standards of the Affordable Care Act.
Maybe 50 percent less, said Craig Hill, president of the Iowa Farm Bureau, which intends to sell them. The plans are a response to health insurance costs that have tripled in recent years, pricing thousands of Iowans out of the market.
Rob Robertson, chief administrator for the Nebraska Farm Bureau, said the group is watching the Iowa plan and considering “all kinds of options” to help its 60,000 member families that need health coverage they can afford.
“It’s a big issue,” Robertson said, when families face health premiums of $30,000 to $40,000 a year for insurance that also requires paying $10,000 or $15,000 in out-of-pocket costs.
The Iowa Farm Bureau is partnering with Blue Cross affiliate Wellmark on the new health benefit plans, which are allowed by a state law signed Monday by Iowa Gov. Kim Reynolds.
The plans may be sold as soon as September. They are not subject to the required benefits and costs of the Affordable Care Act, which also is known as Obamacare.
About half of the Iowa Farm Bureau’s 150,000 member families may sign up for the plans, and as many as 60,000 other Iowans may join the group to sign up, too.
“We have members who are having to borrow money to pay for health insurance,” Hill said, and many others who had to drop their coverage. “The cost of their health insurance is much higher than 50 percent of their living costs.”
The Iowa plan is gaining attention especially because people who don’t have ACA-compliant health insurance will no longer face a tax penalty starting in 2019.
Nebraska Insurance Director Bruce Ramge said he doesn’t know of efforts to allow the trimmed-back plans in the state, although Nebraska law allows small “association” plans with similar features already. He wasn’t sure the law would have to be changed to allow the widespread sale of plans such as those due in Iowa.
Dale Mackel, executive vice president of Blue Cross Blue Shield of Nebraska, said the company is following developments in Iowa and nationally, seeking more choice and access to affordable health care for Nebraskans.
“There could be opportunities for Nebraskans within state and federal regulations,” he said.
Ed Parker, general counsel for the Iowa Farm Bureau, said the intention is to return to the type of health plans that Wellmark sold Farm Bureau’s members from 1969 until the 2010 Affordable Care Act.
The former plans excluded about 15 to 20 percent of applicants because of their health history or conditions and had lifetime limits on claims — both features outlawed by the Affordable Care Act. But most people could afford to buy the plans, and as many as nine insurance companies competed for health insurance in Iowa.
Now there’s only one — Minnesota-based Medica, also the only company selling individual health insurance through the ACA in Nebraska.
Medica said Monday its plans for Iowa won’t change, but the new law could have unfair consequences if the new Wellmark plans exclude people with health problems.
“We understand the sense of urgency to help those struggling with the costs of insurance,” said a statement from Geoff Bartsh, Medica’s vice president of individual and family business. “But this is a hasty solution that will benefit a select few at the cost of others.
“Markets don’t work when some get to play by a different set of rules. There are consequences. Today, healthy farmers should be happy while everyone else may wonder why their costs continue to be high.”
Iowa’s plan is “not a new concept,” said Charles Olson, chief executive of the Omaha insurance brokerage OCi Insurance and Financial Services.
“This is kind of going back to what we were doing before — allowing (insurance) carriers to put together plans that actually can be sold at reasonable rates. This is another step in allowing people to choose the type of plan they want, rather than being told what they have to buy.”
In the end, Olson said, ACA policies may end up covering only low-income people who qualify for government subsidies and those whose medical conditions exclude them from alternative health plans but who can still afford high premium costs.
The Iowa Farm Bureau plan comes under the rules for “association plans,” offered by groups that have something in common such as belonging to an association or small employer.
The Trump administration is drawing up new rules that would allow more association plans to offer health benefits outside the Affordable Care Act. The president and Republicans in Congress want to repeal the law entirely, but so far it hasn’t happened.
“If the ACA’s insurance rules can’t be repealed, then an alternative is to get people the option of escaping them,” Larry Levitt, a senior vice president at the Kaiser Family Foundation, told the Washington Post.