The Affordable Care Act, known as Obamacare, needs a lot of work, Iowa insurance commissioner Nick Gerhart told CNBC Tuesday.
"We have to look at the ACA in its entirety. The risk mitigation tools … really didn't work very well, to be honest, and the carriers just really need more predictability in their pricing," he said in an interview with CNBC's "Closing Bell."
Iowa just approved steep rate increases for the insurers operating in the state, including a 42.6 percent hike for Wellmark.
Gerhart called it a tough decision.
"It really is a math problem. The carriers have had sustainable and large losses," he said. "We have to look at the rates for adequacy for the carrier and affordability for the consumer as well."
"It really had to happen for our market to be sustainable," he added.
Earlier this month, Aetna announced it was going to pull out from 11 of the 15 states where it sells Obamacare, citing financial losses from its individual plans. It will still sell plans in Iowa after increasing rates by 22.58 percent.
UnitedHealth and Humana have also said they will sharply reduce the number of areas in the country where they sell the plans.
Insurers and other observers have said that the risk pool so far is not what they had hoped for, or priced their plans for.
"You need a bigger risk pool," Gerhart said.
— CNBC's Dan Mangan and Linda Sittenfeld contributed to this report.