Iowa likely to have no insurers selling on exchanges for 2018

Medica, a Minnetonka, Minn.-based insurer, said on Wednesday that it may pull from Iowa's individual insurance marketplace, potentially leaving no alternative insurance option for most residents next year.

Medica, which offers exchange plans for 12,645 members in Iowa, has a relatively small presence in the market but the recent exits of other big insurers — Aetna and Wellmark Blue Cross and Blue Shield — makes Medica just one of two insurers selling plans on the exchanges for 2018.

In a statement, Medica said its ability to offer marketplace plans in Iowa "is in question at this point" given the uncertainty in the state's exchanges.

"The two carriers with the most experience in the Iowa market have pulled out. It is incumbent upon Medica to proceed with caution. That means without swift action by the state or Congress to provide stability to Iowa's individual insurance market, Medica will not be able to serve the citizens of Iowa in the manner and breadth that we do today," the insurer said.

Medica added it would like to see federal and state actions to stabilize the market such as establishing a form of high-risk pools to cover high cost plan members and a reinsurance program to offset unknown high-risk members.

Medica also said it's committed to working with state and federal stakeholders to stabilize the marketplace until the June 19th deadline.

Medica and Gundersen Health Plan are the only two health plans expected to sell individual health plans on the exchanges next year. But Gundersen, which offers plans in just four Iowa counties, is also weighing whether or not to offer plans for next year.

If both insurers exit, about 51,600 people enrolled in Iowa's insurance marketplace would have no insurance option next year.

The possible retreat of these insurers comes just weeks after Aetna and Wellmark announced they would stop selling plans in Iowa for 2018.

Aetna blamed financial risk and marketplace uncertainty for its exit. The insurer also cited similar reasons in an announcement Wednesday when it said it would exit from the Virginia individual marketplace. "Despite significantly reducing our exchange footprint, our individual commercial products could potentially lose more than $200 million in 2017," Aetna spokesman T.J. Crawford said in a statement.

Wellmark's exit will affect about 21,400 people — a little more than 1% of Wellmark's membership in Iowa.

The exodus of insurers from Iowa is an example of what can happen nationwide to the individual marketplace if insurers don't get a clear sign that the federal government will continue to support the exchanges, experts say.

Health insurers have threatened to quit offering policies on the ACA's marketplace if they don't get the regulatory details they need to design and price their insurance plans. Insurers have warned Congressional leaders that they need to see signs that the Trump administration will work to stabilize the individual market if they are to commit to selling plans in 2018.

Most states have until June 21 to decide whether to participate. But the Trump administration has yet to address insurers' most pressing concerns about availability of cost-sharing reductions and the enforcement of the mandate that consumers purchase coverage. Those two policies are essential to ensure the individual market stays afloat and affordable during the transition period to an ACA replacement plan.