Iowa pulls ACA waiver application, predicts ‘death spiral’ for state’s exchange

Iowa has withdrawn its request for a request for a waiver under the Affordable Care Act (ACA), calling the law “unworkable” and urging Congress to replace it.

The Des Moines Register reports the proposal would have reconfigured the ACA’s premium support and cost-sharing reduction subsidies into a tax credit system based on age and income. It also would’ve eliminated the state’s health insurance exchange and the different tiers for insurance plans, while offering 85 percent coinsurance protection for insurers on claims of between $100,000 and $3 million.

The proposal went beyond what the ACA allows in its section 1332 waiver process, according to several health policy experts. State officials, however, placed the blame on the law itself and its “inflexible” waiver rules. Iowa Insurance Commissioner Doug Ommen predicted about 20,000 of the state’s 72,000 exchange customers would drop their coverage, leading to a death spiral of the state’s individual market.

“The healthiest are the first to go,” he said. “Those are the people who contribute to a health insurance system, who actually have reasonably low claims.”

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