The American Health Care Act (AHCA) passed by the House of Representatives would cut health insurance for nearly 200,000 Iowans to provide tax cuts for the wealthy, drug companies, and insurance companies. Instead of fixing the problems with Iowa’s health insurance exchange, it would make those problems worse. Supporters’ promises of more state flexibility and individual choice ring hollow. “Flexibility” means an enormous cost shift requiring the state to spend millions more and cut services, while “choice” for thousands of Iowans would be stark: go without health insurance that had become unaffordable, or go without basic necessities such as food.
The AHCA would change Medicaid in two ways. First, it would eventually end the Affordable Care Act’s expansion of Medicaid, through which 150,000 low-income Iowans have gained coverage. Second, the AHCA would cut federal funding for the overall Medicaid program, which would force Iowa to find an estimated $336 million more in the state budget for 2023 in order to maintain current eligibility. The state would likely be forced to restrict Medicaid eligibility and cut benefits to children, the elderly, and the disabled.
Some 191,100 Iowans (38.1% of nonelderly adult enrollees now served) could lose Medicaid under the House plan, according to new analysis by the Urban Institute. The AHCA hits rural and elderly Iowans the hardest, both from the cuts in insurance subsidies and the cuts in Medicaid. In Iowa’s 78 counties outside metropolitan areas, a family of four with $40,000 income would face an average net increase in premiums (after subsidies) of $7,607 per year, and for an elderly couple with the same income, the increase would average $14,582. The likely loss of the Medicaid expansion would disproportionately harm rural Iowans, who are more likely to have health issues and difficulty paying for health care.
One of the most disingenuous claims by AHCA architects is that Americans with pre-existing medical conditions now protected by the ACA would keep that protection under AHCA. In fact, AHCA creates a state option to let insurance companies charge higher premiums and scale back coverage of now-required “essential health benefits.” The quality of health insurance policies is sure to decline as states choose to waive requirements for essential health coverage. By allowing states to eliminate the federal “essential health benefits,” the AHCA would permit employer plans to reinstate annual or lifetime benefit limits, and to stop capping out-of-pocket maximum for certain coverage.
The AHCA makes two very significant changes to Medicaid. It alters the way states are reimbursed for the Medicaid expansion population, and it changes the way the overall Medicaid program is financed. Currently, the federal government pays about 58.5% of the cost of traditional Medicaid in Iowa. The AHCA would likely force an end to Iowa’s Medicaid expansion, which would disproportionately harm rural Iowans who are more likely to have health issues and difficulty paying for health care.