Iowa’s governor signs law allowing plans outside ObamaCare

Iowa’s governor on Monday signed into law legislation that allows insurers to sell cheaper plans that don’t comply with certain ObamaCare regulations.

Gov. Kim Reynolds (R) said the state’s market is collapsing because of the high cost of ObamaCare, with many citizens choosing to go without insurance because the law is pricing them out of the market.

“I have urged Congress to fix this problem, but … we’re done waiting,” Reynolds said at a press conference. “Because of this bill, thousands of Iowans will now have affordable health care coverage.”{mosads}

The law will allow the Iowa Farm Bureau to collaborate with Wellmark Blue Cross and Blue Shield to offer self-funded “health benefit plans.” The plans would not be considered health insurance and so would not be subject to ObamaCare’s insurance requirements.

Those requirements include covering maternity care, mental health, substance abuse treatment, as well as covering people with pre-existing conditions and not charging them more.

Iowa’s law also allows small businesses or self-employed individuals to band together to buy coverage through “association health plans” (AHPs) that don’t meet ObamaCare insurer rules.  

Proponents of association plans say they are cheaper alternatives for small employers or the self-employed. The Trump administration has already proposed expanding association health plans on the national level.

Critics of ObamaCare say the regulations in the law drive up costs and that allowing people to purchase plans that don’t meet the law’s requirements allows more freedom of choice.

But the law’s supporters say Iowa’s move will drive up costs for older enrollees and people with pre-existing conditions while undermining ObamaCare and destabilizing the state’s shaky health insurance market.

“This legislation will allow insurance companies to sell junk plans without proper oversight — precisely the kind of abuses the Affordable Care Act was designed to stop,” said Leslie Dach, chair of the pro-ObamaCare advocacy group Protect Our Care.