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Paul Ryan needs to update his Obamacare facts as Medica opts to state in Iowa

  • House Speaker Paul Ryan incorrectly said that Iowa would have counties next year that would lack an insurance provider on the Obamacare exchange.
  • Medica told CNBC last Friday it is staying in Iowa and all of the other states in which it is currently operating.

Whoops!

House Speaker Paul Ryan apparently did not update his Obamacare factoids, in his opening statement Tuesday.

Speaking at the National Association of Manufacturers summit, Ryan incorrectly said that Iowa would have counties next year that would lack an insurance provider on the Obamacare exchange. For some time this spring, it appeared that would be the case.

At that time, Minneapolis-based Medica signaled it might leave the Iowa exchange, which would have left nearly all counties in the state — and nearly 70,000 residents — without an insurance provider.

However, Medica told CNBC last Friday it is staying in Iowa and all of the other states in which it is currently operating.

But that decision is coming at a cost. On Monday, Medica filed for a 43 percent rate increase in Iowa, citing the uncertainty in the market.

John Naylor, CEO of the not-for-profit insurer, said last week that the big problem facing insurers is the uncertainty over cost-sharing reduction subsides and over the Trump administration's commitment to enforce the individual mandate.

"When the federal government set out certain rules, our expectations are that these rules are followed," Naylor told CNBC. He said he is watching the decision to make these payments "very closely."

"So as we look at the pricing, we need to know are those rules going to be enforced in 2018," he said.

Cost-sharing reduction subsidies were established in the Affordable Care Act to help lower-income consumers purchase insurance. In some cases, the subsidies can be used both to offset the cost of premiums as well as copayments and other costs patients must pay out of pocket.

The White House has continued to make payments, however, it is possible they could stop.

During the Obama administration, the Republican-controlled House of Representatives had challenged the legality of the reimbursements in court, claiming the payments were being made by the government without congressional appropriation. A federal judge agreed with that stance. However, the administration appealed that decision.

Now it is up to the Trump administration to decide if it wants to support the appeal of the court decision. If it drops the case, it could also decide to stop paying the subsidies, which could result in health care becoming more unaffordable for those lower-income consumers.

This would be even worse if Congress eliminates the Obamacare provision that requires nearly everyone to have insurance or pay an annual penalty.

Together, CSR payments and the individual mandate encourage healthy people to sign up for health insurance, and help provide stability to the insurance market.

Ryan's speech noted that other insurance companies have pulled out of some Obamacare markets. Anthem has quit the Obamacare exchange in Ohio, which may leave 18 counties without a provider.

Blue Cross and Blue Shield of Kansas City quit the Missouri exchange, leaving 25 western Missouri counties without an insurer on the Obamacare exchange.

A spokesperson from Ryan's office didn't immediately respond to a request for comment.