Some of the worst ideas for "reforming" the Affordable Care Act failed in Congress when the Senate rejected Trumpcare, but that doesn't mean Republican states won't try to push that agenda with the Trump administration's assistance. Case in point, Iowa's request for a waiver from the Trump administration to "redistribute subsidies from the poor to wealthier people" and no, that's not a joke.
Under Iowa's state innovation waiver request, residents would receive premium subsidies based on broad age and income categories, without using the Affordable Care Act's calculation to cap premium costs at a certain percentage of a person's income. The state revenue department would determine a person's eligibility and level of subsidy, rather than having that determination made by the federal exchange.
Another change is that people earning more than 400% of the federal poverty level would be eligible for premium subsidies. Meanwhile, people with incomes from 138% to 250% of poverty would no longer receive cost-sharing subsidies to reduce their deductible and coinsurance payments.
The state would use a portion of the federal subsidy money to set up a reinsurance program to protect insurers that sign up high-cost enrollees. […]
[O]utside experts say eliminating cost-sharing reductions would make healthcare unaffordable for lower-income people, who would face a $7,350 per-person deductible under the Iowa waiver proposal. The state's proposed standard plan would also charge copayments for various services—such as $400 for advanced imaging and $10 to $300 for prescription drugs—though it would not charge any co-insurance percentage.
So the people up to 250 percent of poverty ($61,500 for a family of four, $30,150 for an individual) would no longer get assistance for their deductibles or other out-of-pocket costs. Great. About 28,000 Iowans received the cost-sharing assistance last year, reducing their deductibles to around $200. Increasing that deductible by about 40 times is going to hurt, and it's going to hurt the most vulnerable the most. "The hardest hit will likely be the sickest people, who could find it more difficult to afford medical care and prescriptions," Karen Pollitz, a senior fellow at the Kaiser Family Foundation told Modern Healthcare.
It would also likely reduce enrollment by lower-income people. But the state says it has to do it so it can increase enrollment by making premiums more affordable for the people with money. Iowa does have a problem—mostly self-inflicted—because it has just one insurer and that insurer, Medica, has proposed a 57 percent rate hike for 2018. One reason for that single carrier is Iowa's decision to continue to allow cut-rate insurance policies grandfathered from pre-ACA. About 85,000 people are in those old non-compliant plans, and not in the marketplace.
If the Trump administration does decide to collaborate with Iowa to rob the poor to help the rich and approve a waiver, the state could face a legal challenge. The law requires that these state innovation waivers still cover at least as many people with benefits that are as affordable and comprehensive as offered by the ACA exchange, and it seems pretty unlikely that Iowa's would do that.