How to fix Iowa’s $1.3 trillion health care system
Dubuque, Iowa—It’s a time of uncertainty for Iowa, where the health care industry is facing a crisis of confidence, a sharp drop in its health care spending, and a growing concern that its own insurance market will fail in the face of the Affordable Care Act’s expansion of coverage.
And it’s a question that has been raised as much in Iowa as it has anywhere else in the country: how to fix the health insurance system.
“We have a lot of uncertainty right now, and the system is not doing well,” said David G. Tipton, president and CEO of the Iowa Insurance Association.
“The big question is: How can we fix it?”
That’s a tough question to answer given the uncertainty surrounding the Affordable Health Care Act, or Obamacare, which is expected to become law next year and will allow millions of Americans to buy insurance through the new exchanges.
While the administration is trying to make a dent in the state’s health care woes, other problems are still looming.
A report published this week by the nonpartisan Kaiser Family Foundation, a nonpartisan health policy research and consulting group, estimated that the federal government will spend $1 trillion to cover the state population through the 2020 federal fiscal year.
While that is a steep increase over the previous four years of $1,000 billion, that amount will be nearly double the amount spent in the entire U.S. in 2016.
“It is the most expensive in the nation,” said Matt Zegin, senior vice president of government affairs at the nonprofit Kaiser Family Alliance.
“That is the reason why it’s such a critical question.
You can’t ignore the fact that we’re still in a transition period where we’re going to have to get the system to work again.”
The state’s budget woes, which have been the topic of public debate since the beginning of the year, are well known to anyone who has been paying attention to Iowa politics.
But it’s not clear how the health system is faring at the moment.
A recent Kaiser poll found that 76 percent of Iowa residents said they were not confident in the health of the health plan they purchased through the exchange, which will launch in the first half of 2020.
That’s the same percentage that said that about two months ago.
“This is a system that we are operating with a lot uncertainty,” said Sen. Chris Larson, R-Iowa City.
“I can’t be more confident than I am now that our health care will be a success, but the reality is we’re in the midst of this very uncertain time.”
And the uncertainty has been especially pronounced in the last few months, with some insurers abandoning the state.
“For a long time, we’ve had a very good reputation for being a competitive state, and I think we have a real shot to be the leader of the pack,” said G. Michael Gagnon, a health care consultant and former president of the American Association of Insurance Commissioners.
“But we have this one thing that is very challenging, and that is the lack of confidence among some insurers.
That means that they don’t feel confident that they’re going be able to get into this market, and it means that the cost is going up and the premiums are going up.”
The biggest challenge facing the Iowa health care market is that it is built on a small network of insurers, with only a handful of insurers offering coverage across the state, according to Kaiser’s analysis.
That makes it particularly hard for Iowa residents to find an insurer they can trust.
The ACA, which was signed into law by President Donald Trump in March, expanded the federal role in insurance markets, creating the first statewide exchange for consumers to purchase coverage.
The state has a population of just over 21 million and more than 3.5 million people are eligible for federal subsidies to buy private insurance through state-run insurance markets.
That subsidy allows those in the states with the lowest health care costs to qualify for federal tax credits that pay for private insurance, which can range from $2,000 to $14,000 a year.
The insurance market is considered one of the most competitive in the U.K., according to a recent report from the UBS Research Institute.
That study, released in July, found that in the UK, a network of 11 large insurers offers about $4.5 trillion worth of insurance, while in Iowa, only one insurer offers insurance to more than half the population.
“Iowa’s healthcare system is still a work in progress,” said Zegins.
“There are a lot more unknowns, and there are a few unknowns about how well this health care model is going to work.”
In the meantime, the number of insurers operating in Iowa has dropped by more than a third since last year, according, according the Kaiser Family Foundations analysis.
“Even if you were to say that all the carriers are in trouble, you’re still talking about a lot less than 1 percent of the state market