Critics said approving the Iowa waiver would have paved the way for other states to follow, eroding the health law’s protections for low- and middle-income Americans. Some had planned on filing a legal challenge if the Trump administration had said yes to the request, known as a “state innovation waiver.”
“This is a case of the law’s guardrails protecting people and their coverage,” said Sarah Lueck, a senior policy analyst at the Center for Budget and Policy Priorities, a left-leaning group that had opposed the waiver. “Hopefully now Iowa can start looking at more practical and less disruptive solutions to deal with the challenges in its market.”
The Washington Post reported recently that President Trump in August had asked Seema Verma, the federal official in charge of reviewing Iowa’s plan, to reject it. Some supporters of the law saw that as a deliberate effort to keep premiums high; Mr. Trump frequently cites sharply rising premiums as proof that the health law is failing.
But Ms. Reynolds said the Trump administration had worked with Iowa “to the greatest extent possible” to get the waiver approved. The health law allows such waivers only if a state proves the alternative coverage will be as comprehensive and affordable, covers a comparable number of people and does not increase the federal deficit.
Last week, the administration informed the state that its plan would likely increase the federal deficit, but that it would take several weeks to figure out by how much. That, Ms. Reynolds said, prompted her to withdraw the request.
In a joint statement with Ms. Reynolds, Ms. Verma echoed Mr. Trump’s contempt for the 2010 law, calling it “unaffordable, unsustainable and unworkable.”
The individual insurance market is particularly fragile in Iowa, partly because the state has allowed tens of thousands of healthy people to keep old plans that do not comply with the health law. Aetna and Wellmark Blue Cross & Blue Shield, the state’s most popular insurer, are both withdrawing at the end of the year.
The only insurer remaining in Iowa’s Affordable Care Act marketplace for next year, Medica, is seeking premium increases that average 56 percent, blaming Mr. Trump’s decision to stop paying subsidies known as cost-sharing reductions that lower many people’s deductibles and other out-of-pocket costs. Most Iowa customers will not feel the increase, however, because they qualify for premium subsidies that will rise to cover it. But state officials have predicted that most of the 28,000 people who receive no subsidies will cancel their coverage.
So far, the Trump administration has granted state innovation waivers to three states, Alaska, Minnesota, and Oregon; they will use federal money to help insurers cover the claims of their most expensive customers next year, with the intent of lowering premiums. Oklahoma abruptly withdrew a similar request last month — one that state officials said would have reduced premiums by an average of 30 percent — saying that the Trump administration had been too slow to approve it.