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Iowa just lost half its Obamacare insurers

The news raises new uncertainties about the law’s future.

Photo by Jessica Hill/Associated Press

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Two major insurers said this week that they wouldn't sell insurance in Iowa's Obamacare marketplace, both citing concerns about the current uncertainty around the health law's future. This means that 94 of Iowa's 99 counties will have just one insurer selling on when open enrollment starts in November.

Wellmark (Iowa's largest health plan) announced Monday that it would no longer sell coverage in the individual market. Aetna followed on Thursday, with a spokesperson telling Bloomberg it would leave the Iowa market "as a result of financial risk and an uncertain outlook for the marketplace."

Health insurers across the country are making decisions right now about whether they want to participate in Obamacare's marketplace next year. These Iowa insurers are among the first to make up their minds — and have decided that the Obamacare marketplaces are just too risky of an investment in an era of repeal and replace.

The big outstanding question is whether we'll see similar things happen outside of Iowa. Most insurers have so far stayed mum on whether they plan to sell on the marketplaces next year. The deadline to decide isn't until June 21. But they're starting to make decisions, and those will roll out over the next few months.

How much does this have to do with current repeal push? Participation in the Obamacare marketplaces was going down before the election. You probably remember the headlines from last summer when insurance giants like United and Aetna pulled out of a lot of markets. That left lots of places with just one insurer selling coverage

Insurers were already on the fence about the marketplaces. The uncertainty about what will happen next — coupled with the president's repeated predictions that the law will explode — aren't exactly inspiring confidence that this is a business worth sticking with.

“The health plans I work with want to stay in," says Robert Laszewski, a health industry consultant. "But the Trump administration is not making that easy.”

Want to know what happens next? Keep an eye on Blue Cross Blue Shield plans. There are lots of Obamacare marketplaces right now — such as in nearly all of Alabama, for example — where the Blue Cross Blue Shield plan is the only remaining insurance option. The nonprofit Blues have proven much more committed to making the marketplaces work than their for-profit competitors. Many see themselves as community plans. Before Obamacare, they were often the "insurer of last resort" — the one plan that would cover people with expensive preexisting conditions (charging a high premium, of course) when other plans would reject those customers. Forbes's Bruce Japsen has described the Blues as the marketplace's "firewall."

Wellmark, which dropped out of Iowa, is a Blue Cross Blue Shield plan. If others decide to follow its lead, then the Obamacare marketplaces will be in big trouble.

Another day, another phantom AHCA vote

There is a great line from the movie Casablanca about Captain Renault's bar tab. It's right after he orders a bottle of expensive champagne. "It is a little game we play," he explains. "They put it on the bill, I tear up the bill. It is very convenient."

As my editor Jim Tankersley points out, this appears to be what's happening on health care right now. There is the appearance of movement (an amendment! a meeting! a scheduled vote!), but at the end of the day, it does not lead to any substantive movement forward.

Case in point: This morning, the Hill was buzzing about a new health care amendment that would supposedly receive a vote in the afternoon. Offered by two Freedom Caucus members, it would provide states with an additional $15 billion to offset premiums for the most expensive patients in the individual market.

Early in the day, there was chatter that this amendment would receive a floor vote on Thursday. But by midafternoon it became clear that would not be true. Just like the last AHCA vote, it was not meant to be. It moved through the Rules Committee but did not go to the floor.

This whole cycle of pseudo-activity is great for most actors involved. Republicans create the impression of making progress on their bill even when they haven't resolved key disagreements. They get to go back to their districts over recess and talk about how they're still hard at work on a major campaign promise.

Reporters (myself included!) get to write more stories about the latest twists and turns of the legislative debate.

But there is one thing that pseudo-activity is bad for: actually passing a bill. That requires real, genuine activity — and all evidence suggests there isn't much of that happening right now. The House will now be on recess for two weeks. They leave having made no significant progress on the key issues that divide the Freedom Caucus from the more moderate Republicans — namely, how much of Obamacare they should repeal. For all the discussion of a revived health care repeal effort, Republicans are no closer to passing a bill than when they started the week.

Stat of the Day

Economist / YouGov Poll

A new poll finds strong support for universal health care from Trump voters. On Monday, I wrote about a focus group I conducted with Trump voters in which half said they'd like to see the United States move to a health care system like the one Canada has. A new Economist/YouGov poll suggests this wasn't an anomaly, finding that 40 percent of Trump voters would favor "Medicare for All."

Kliff's Notes

With research help from Caitlin Davis

  • "White House divided on Obamacare payments": “One senior official said that the Department of Health and Human Services and the White House Office of Management and Budget were studying the impact of abruptly stopping billions of payments to the health plans that participate in the Obamacare markets. Insurers would have to pick up these costs, regardless of whether the federal funds are released. White House adviser Steve Bannon and his allies have argued to stop the subsidies, although even the hard-core Obamacare foes worry about the fallout from a precipitous collapse, according to sources inside and outside of the administration.” —Josh Dawsey, Joanne Kenen, and Jennifer Haberkorn, Politico
  • "Thousands of brokers exit as plan commissions go unpaid": “More insurance companies around the country are refusing to pay brokers commissions on higher-tier exchange plans or special enrollment sales as the companies face financial losses on the federal marketplace, according to Ronnell Nolan, CEO of Health Agents for America, which represents independent insurance brokers. ‘It's the Wild West out here, and companies are doing what they can to survive,’ Nolan said. ‘They're not paying commissions on platinum plans, and they are not paying them for special enrollment plans which cover some of the sickest patients.’” —Virgil Dickson, Modern Healthcare
  • "Ivanka's secret Planned Parenthood outreach": “‘The purpose of the meeting, from [Planned Parenthood head] Cecile [Richards]’s point of view, was to make sure that Ivanka fully understood what Planned Parenthood does, how it is funded, and why it would be a terrible idea for Planned Parenthood to be removed from being able to see Medicaid patients,’ said Dawn Laguens, executive vice president of the Planned Parenthood Federation of America. ‘The main thing that Cecile Richards was doing was explaining that the money doesn’t actually go to abortions — we get reimbursed the same way a hospital does. We were clearing up misinformation about how this works.’” —Annie Karni, Politico

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