News

The Cedar Rapids Gazette (4/20, Ramm) reports that about 37,000 Iowans hold transitional policies, the Iowa Insurance Division will allow non-compliant insurance plans to exist through calendar year 2019.

Following federal approval, the state agency announced on 4/19/18 that individuals and small groups with transitional or "grandmothered" health insurance policies, which do not meet certain Affordable Care Act (ACA) rules, can continue with those plans through the end of next year.

Transitional plans are plans purchased after the ACA was passed, but before it was implemented in 2014.  An estimated 37,000 Iowans have the transitional insurance plans, according to the Iowa Insurance Division.

Iowa Insurance Commissioner, Doug Ommen, said in a news release that he was concerned about "the rate shock" for these thousands of individual policyholders.  "If these Iowans were forced to join the collapsed individual ACA-compliant market, they would see rate increases between 100 and 400 percent," he said.  Those individuals, he said, have chosen not to enroll in the ACA marketplace.  "They like their plans, and they have kept them," Ommen said in the statement.  "Without transitional plans as an option for these Iowans, most would likely join the up to 26,000 Iowans that have fled our ACA-compliant individual market this year."

Nationwide, allowing the existence of these plans is cited as a major factor in the high premium rates and the destabilization of the individual marketplace, according to Modern Healthcare, a healthcare-industry publication.

The Centers for Medicare and Medicaid Services extended its policy for transitional plans several times since 2013, most recently until the end of 2018.