POLICY BRIEF
January 19, 2017
www.iowafiscal.org
Repealing ACA: Pushing thousands of Iowans to the brink
Likely turmoil in insurance market, higher premiums, and harm to the economy
ByPeterFisher
RepealingtheAffordableCareAct(ACA)withoutanadequatereplacement,asCongressandthe
incomingTrumpadministrationappearpoisedtodo,jeopardizesthehealthcarecoverageand
economicwell-beingofthemostvulnerableIowans.About230,000fewerIowanswouldhave
healthcoveragein2019ifthelawisrepealed,including25,000children.Thousandsofadults
workinginlow-wagejobs—suchasthosewaitingtables,workingonconstructionsites,bagging
groceries,orprovidingcaretochildren,thesick,andtheelderly—wouldlosecoverageifthe
Medicaidexpansionisrepealed.Forfamiliesunabletoaffordhealthcoverageontheindividual
marketpriortohealthreform,coveragesubsidizedbytaxcreditscoulddisappear,and42,000
individualswouldlosetheirinsurance.Morepeoplewouldturntohospitalsandotherhealth
providersforuncompensatedcare,whichwouldlikelybeprovidedinemergencyrooms,leaving
thosewhoareinsuredtopaythebillthroughtheirownpremiums,orforhealth-careprovidersto
swallowthecost.Iowa’seconomywouldsufferas$446millioninfederalfundswouldbe
withdrawnfromthestate,reducingemploymentandspendinginlocalbusinesses.Theinsurance
marketwouldbethrownintoimmediatedisarray,raisingpremiumsandreducinginsurance
options.SucharetheprospectsforIowaasdecisionsloominWashingtonontheACA.
The Affordable Care Act dramatically expanded health insurance coverage in Iowa
ThenumberofIowanswithouthealthinsurancedeclinedbyalmost93,000between2013(prior
toimplementationoftheAffordableCareAct)and2015,thesecondyearinwhichtheACAandthe
insuranceexchangewerefullyimplementedinIowa.Thisrepresentsa37percentdeclineinthe
numberofuninsured.Statewide,thepercentofpersonswithoutinsurancedeclinedfrom8.1
percentto5percent.
Increasedcoverage
cameintwoways:(1)
about47,000more
individualspurchased
privateinsurance
directly,with
subsidiesavailableto
mostofthosethrough
theACA,and(2)
about70,000more
Iowansobtained
healthinsurancefrom
Medicaid.
The Iowa Policy Project
www.iowapolicyproject.org
Child & Family Policy Center
www.cfpciowa.org
Atthesametimethatoptionsexpandedforpeopletoaccesspubliclyfundedorsubsidized
coverage,thenumberofIowansobtaininghealthinsurancethroughtheiremployeractually
increasedby28,000overthetwo-yearperiod.TheACA,inotherwords,doesnotappeartohave
causedemployerstoeliminatehealthinsuranceandpushemployeesontopublicplans.
Themostdramatic
decreaseinthe
numberofuninsured
occurredfornonHispanicwhite
Iowans,amongwhom
thenumberdropped
by85,000,accounting
for92percentofthe
decreasestatewide.
Theuninsuredrateforthispopulationdeclinedfrom7percenttoabout4percent.TheACAhad
muchlessdramaticeffectinreducingtheuninsuranceratesamongHispanics,AfricanAmericans
andothernon-whiteIowans,wheretheuninsuredshareremainedat12percentorhigher.
Thepercentofthepopulationthatwasuninsureddroppedinnineofthe10mostpopulous
countiesinIowa,inmostcasesbyasubstantialamount.Theuninsuredrateinthemorerural
remainderofthestatealsodeclineddramatically,from9.2percentto5.3percent.Alltold,about
41,000fewerIowansinthe10largestcountieswereuninsuredin2015,while52,000fewer
Iowansintheremainderofthestatehadcoverage.
Figure 1. Large Drops in Iowa Uninsured Population with ACA
Percent of population uninsured in Iowa’s largest counties, 2013 and 2015
Source: American Community Survey, 1-year estimates, 2013 and 2015
2
Table 3. Two-year Progress in Health Coverage Across the State Under the Affordable Care Act
Health insurance coverage in larger counties and remainder of Iowa, 2013 and 2015
Source: American Community Survey, 1-year estimates, 2013 and 2015
Repeal would increase the number of uninsured Iowans
TheACAhasmadegood-qualityhealthinsuranceavailabletothousandsoflow-incomeindividuals
andfamiliesinIowawhootherwisecouldnotaffordcoverage.About55,000Iowanspurchased
insuranceontheexchangeduringthe2016enrollmentperiod,and85percentofthemqualified
forthepremiumtaxcredit.1Theaveragemonthlypremiumforthosepurchasinginsuranceonthe
exchangewas$425,with$303,or71percentofthiscost,coveredbythecredit.TheACAsubsidy
thatisnowindangerreducedtheaveragecosttoACAenrolleesto$122permonth.Nearly
28,000peopleinthisgroupalsoreceivedcost-sharingreductions(CSRs),whichlowered
deductiblesandotherout-of-pocketcostsforthembyroughly$28millionthatyear.
TheUrbanInstitutehasestimatedthatiftheACAisrepealed,230,000fewerIowanswillhave
healthinsurancecoveragein2019thanifthelawisleftasis.2Ofthese,42,000areindividualswho
willreceivetaxcreditsforthepurchaseofhealthinsuranceiftheACAcontinues,creditsworthon
average$4,281perrecipientperyear.Thecreditcoversovertwo-thirdsofthecostofhealth
insuranceonaverage.Fewpeoplecouldaffordtokeeptheircoverageiftheylosethatsubsidy.
Asaresultoftheselossesincoverage,theUrbanInstituteprojectsthatACArepealwouldincrease
thenumberofuninsuredinIowafrom153,000to383,000,a150percentincrease.3Thisincludes
anincreaseof25,000inthenumberofuninsuredchildren,aswellas68,000moreuninsured
parents.4ThepercentageofIowachildrenwithouthealthinsurancewouldmorethandouble,
from3percentto6.2percent.
TakingMedicaidcoverageawayfromthousandsofadultswouldlikelyleadtoanincreaseinthe
numberofuninsuredchildren.Thisisbecauseadultswhoareuninsuredarelesslikelytoenroll
theirchildreninMedicaidorhawk-I.5FormanychildreninIowa,thiswillmeannotjustpoorer
health,butpoorerlong-termprospectsoverall.Researchhasshownthatbetterhealthcareasa
childisassociatedwithgreatereducationalattainmentandhigherearningsasanadult.6
3
Repeal of the Medicaid expansion would cut eligibility below pre-ACA levels
In2014IowacreateditsownversionoftheMedicaidexpansion,calledtheIowaHealthand
WellnessPlan.About146,000peoplewereenrolledintheWellnessPlaninFY2016.Allofthose
individualsnowintheWellnessPlanareatriskoflosinghealthinsuranceiftheMedicaid
expansionportionoftheACAisrepealed.
PriortotheACA,Iowa Figure 2. Coverage through ACA subsidies and Medicaid Expansion at Stake
hadcreateda
Enrollment in public insurance programs in Iowa before and after the ACA
Medicaidwaiver
programcalled
IowaCarethat
extendedMedicaid
benefitstomany
adultsnoteligible
undertraditional
Medicaid.7Therewere
69,000people
enrolledinIowaCare
inFY2013.8Withthe
adventoftheACAin
2014,thoseenrolled
inIowaCarewere
automaticallyshifted
totheIowaWellness
Source: Iowa Department of Human Services; U.S. Department of Health and Human
Program,and
Services, ASPE Issue Brief, March 11, 2016. Health Insurance Marketplaces 2016 Open
IowaCareceasedto
Enrollment Period: Final Enrollment Report For the period: Nov. 1, 2015- Feb. 1, 2016.
exist.IfCongress
repealstheMedicaidexpansion,allthoseintheWellnessProgramwouldbeatriskoflosing
coverage.PeoplelosingcoveragewouldincludethoseformerlyinIowaCare,unlessthestaterecreatedsuchaprogramunderawaiverrequestonceagainandgotapprovalforthatwaiverfrom
thefederalgovernment.Thisisunlikely.ThustherepealoftheACAcouldleavetensofthousands
ofadultsuninsuredwhoactuallywereinsuredpriortotheACA,orwhocouldhavebeencoveredif
IowaCarestillexisted.Thiswouldleavelow-incomeIowansworseoffthantheywerein2013,
priortohealthreformtakingeffect.
Working Iowans would be hurt by Medicaid expansion repeal
Themajorityofthenon-elderlyadults
Table 4. Majority of Medicaid recipients are workers
receivingMedicaidareworkingIowans. Work Status of Iowa Medicaid Recipients Age 18 to 64, 2015
In2015,61percentofMedicaid
recipientsage18to64wereworkingat
leastparttime.Athirdofthosewere
workingfulltimeatlow-wagejobsthat
leftthemearningnearthepovertyline.
Manyoftheseadultsgettheirhealth
Source: American Community Survey, 1-year estimates, 2015
coveragethroughtheIowaWellness
Programandarethusatriskof
becominguninsurediftheMedicaidexpansionisrepealed.
4
AmongtheadultMedicaidrecipientsinIowawho
areworking,about45percentworkin10
industries.Theyarewaitingtables,workingon
construction,bagginggroceries,orserving
children,thesick,andtheelderly.Theyare
workinginjobsthatpaylittleandprovidefewif
anybenefits.
Table 5. Where Iowa Medicaid recipients work
Top 10 industries for adults age 18 to 64, 2015
Uncompensated care would rise with repeal
TheACAexpandedinsurancecoverageto
thousandsofIowanswhowouldotherwisehave
soughtemergencyroomorothercarethatthey
couldnotpayfor,butwhichhospitalsanddoctors
nonethelessareobligatedtoprovide.This
Source: American Community Survey, Public Use Microdata
“uncompensatedcare”wasgreatlyreducedbythe
Sample,1-year estimates, 2015, from IPUMS
ACA.Withrepealandthelossofinsurance
coveragefor230,000Iowans,itisestimatedthattotaluncompensatedcareinIowain2019
(assumedtobethefirstyearinwhichrepealisfullyineffect)wouldmorethantriple,from$345
millionto$1.2billion.9Overa10-yearperiod,a$10billionriseinuncompensatedcareinIowais
anticipated.AllIowanswouldfeeltheeffects,ashospitalfeesandinsurancerateswouldriseto
makeupforthesecosts,andashospitalsretrench.
Thedeclineinhealthinsurancecoverageandtheriseinuncompensatedcarecouldbeespecially
challengingforIowa’sruralhospitals.Ruralhospitalsaremorelikelytobeinaprecarious
financialsituationiftheyareinastatethatdidnotexpandMedicaid,andrepealwouldthrowall
Iowahospitalsintothatsituation.Since2010,80ruralhospitalsacrossthecountryhaveclosed,
themajorityinnon-expansionstates.
Repealing the ACA would cause immediate harm
RepealoftheACAwouldlikelyfollowtheprovisionsoftherepealbillpassedbyCongresslast
year.Thiswouldeliminateimmediatelytheindividualmandatetopurchaseinsuranceorpaya
penalty,whileretainingpopularprovisionssuchastherequirementthatinsurancecompaniesnot
denycoveragebecauseofpre-existingconditions.Theresultisthatmanyhealthyindividuals
woulddroptheircoverage.Insurancecompanieswouldbeleftwiththesickestandmost
expensivecustomers,whichwouldpromptsometoleavethestate’sindividualinsurancemarket
ortoraiseratesforremainingcustomersiftheystayed.Thehealthinsurancemarketwouldthus
bedevastatedquickly,eventhoughfullrepealofthesubsidiesandotherprovisionsofACAwould
bedelayed,possiblyuntil2019.
RepealwouldalsoendangersomeoftheACA’smostimportantconsumerprotections.No
“replacement”planhasbeenproposed,butitislikelythatthequalityofinsurancepoliciesinthe
individualmarketwoulddeteriorate,withrisingdeductibles,thereturnoflimitsonhowmuch
insurerswillpayoutinbenefitseachyearoroveraperson’slifetime,andfailuretocoversuch
thingsasmaternitycare,mentalhealth,orprescriptiondrugs.
Withrepealoftheindividualmandateandthesubsidies,itwouldbeuntenabletomaintainthe
ACA’sprotectionsforpeoplewithpre-existinghealthconditions.InIowa,thenumberofadults
withpre-existingconditionsthatwouldhaveledtodenialofinsurancecoveragepriortotheACA
5
hasbeenconservativelyestimatedat448,000,orabout24percentofnon-elderlyadultsinthe
state.10Ensuringtheindividualinsurancemarketisaccessibleandaffordableforthisgroup,
shouldtheyneedtopurchasecoveragethere,hasbeenamajorachievementoftheACA,butone
madepossibleonlybecauseofthemandateandthemarketplacesubsidies,whichbroadenedthe
poolofindividualstheinsurancecompanieswerecoveringtoincludemanyhealthieradults.
Withoutthebroaderpool,insurancecompanieswillnotcontinuetoofferquality,affordable
policies,tothedetrimentofallthosebuyinghealthinsuranceinIowa.
ContrarytowhatsomeinCongresshavebeensaying,theexchangesarenotinadeathspiral—
higherpremiumscausinghealthyindividualstoforgoinsurance,leavingtheinsurancecompanies
withamorecostlypool,leadingtohigherpremiums,etc.Enrollmentthroughtheexchangeshas
increasedeachyearsinceinceptionin2014,and2017enrollmentisaheadoflastyear’s.Thereis
evidencethatthepremiumincreasesthisyearareaone-timecorrectionforunderpricingin
previousyears,notthebeginningofatrend.11Infactitisrepeal,notcontinuation,oftheACAthat
wouldpushtheexchangesintoadeathspiral.
Repeal would shower benefits on the wealthy
RepealofthetaxesfinancingtheACAwouldlavishtaxcutsonthehighest-incomehouseholdsin
thecountry.TheMedicaretaxesimposedbytheACAfallonlyonindividualswithincomesabove
$200,000orcoupleswithincomesabove$250,000.The400richesthouseholdsinthecountry
wouldreceivea$2.8billionwindfallin2017ifthesetaxeswereended,foranaveragetaxcutof
about$7millionayearforeachhousehold.12Withouttherevenuefromtheseandothertaxes
imposedbytheACA,itwouldbedifficultorimpossibletofinanceareplacement.
Repeal would harm Iowa’s economy
TherepealoftheACAwouldhaveasubstantialimpactontheIowaeconomy,cuttingoffbillionsin
federalmoneyflowingintothestate,andreducingincomeandemployment,notjustinthehealth
careindustry,butthroughouttheeconomy.
RepealoftheACAwouldresultinthelossof$446millioninfederalfundsin2019,andatotalof
$5.4billionfrom2019-2028.13Thatwouldreducepaymentstohealthcareprovidersthroughout
thestate,whointurnwouldreducepurchasesfromvendorsandcutemployment.Rippleeffects
wouldfollow:vendorswouldcutpayroll,andthereducedspendingbyemployeesbothofthe
healthcareprovidersandofthevendorswouldmeanreducedpurchasesofgoodsandservicesin
Iowa,andreducedstatetaxes.Nationalestimatesindicatethatrepealwouldcost2.6millionjobs,
aboutathirdofthoseinthehealthcaresector,buttwo-thirdsinothersectorssuchas
construction,retail,finance,andservices.14
U.S. Department of Health and Human Services, ASPE Issue Brief, March 11, 2016. Health Insurance Marketplaces 2016 Open
Enrollment Period: Final Enrollment Report For the period: November 1, 2015 – February 1, 2016.
2 Linda J. Blumberg, Matthew Buettgens, and John Holahan. Implications of Partial Repeal of the ACA through Reconciliation. Washington,
DC: The Urban Institute, December 2016. Available online at http://www.urban.org/research/publication/implications-partial-repeal-acathrough-reconciliation
3 Linda J. Blumberg, Matthew Buettgens, and John Holahan. Implications of Partial Repeal of the ACA through Reconciliation. Washington,
DC: The Urban Institute, December 2016. Available at http://www.urban.org/research/publication/implications-partial-repeal-aca-throughreconciliation
1
6
Matthew Buettgens, Genevieve Kenney, and Clare Pan. Partial Repeal of the ACA through Reconciliation: Coverage Implications for
Parents and Children. Washington, DC: The Urban Institute, December 21, 2016. Available at:
http://www.urban.org/research/publication/partial-repeal-aca-through-reconciliation-coverage-implications-parents-and-children.
5Government Accountability Office. Medicaid and CHIP: Given the Association between Parent and Child Insurance Status, New
Expansion May Benefit Families. February 2011. Available at: http://www.gao.gov/new.items/d11264.pdf .Georgetown Center for Children
and Families, Medicaid Expansion: Good for Parents and Children. January 2014. Available at: http://ccf.georgetown.edu/wpcontent/uploads/2013/12/Expanding-Coverage-for-Parents-Helps-Children-2013.pdf 6Medicaid’s Long-Term Earnings and Health Benefits. Center on Budget and Policy Priorities, May 12, 2015. Available at:
http://www.cbpp.org/blog/medicaids-long-term-earnings-and-health-benefits Medicaid at 50: Covering Children Has Long-term
Educational Benefits. Center on Budget and Policy Priorities, July 7, 2015. Available at: http://www.cbpp.org/blog/medicaid-at-50-coveringchildren-has-long-term-educational-benefits
7Traditional Medicaid covers low-income individuals who are aged, blind, disabled, pregnant women, children, or parents of children on
Medicaid.
8 https://dhs.iowa.gov/sites/default/files/IowaCare_Narrative.pdf
9 Matthew Buettgens, Linda J. Blumberg, and John Holahan. The Impact on Health Care Providers of Partial ACA
Repeal through Reconciliation. The Robert Wood Johnson Foundation and the Urban Institute, January 2017.
http://www.urban.org/sites/default/files/publication/86916/2001046-the-impact-on-health-care-providers-of-partial-aca-repeal-throughreconciliation_0.pdf
10Gary Claxton, Cynthia Cox, Anthony Damico, Larry Levitt, and Karen Pollitz.Pre-existing Conditions and Medical Underwriting in the
Individual Insurance Market Prior to the ACA. Kaiser Family Foundation, December 12, 2016. Available at: http://kff.org/healthreform/issue-brief/pre-existing-conditions-and-medical-underwriting-in-the-individual-insurance-market-prior-to-the-aca/
11Sarah Lueck. “Commentary: Even as Insurance Market Improves, GOP’s ACA Repeal Would Kill It.” Center on Budget and Policy
Priorities, January 17, 2017. Available at: http://www.cbpp.org/health/commentary-even-as-insurance-market-improves-gops-aca-repealwould-kill-it
12Brandon DeBot, Chye-Ching Huang, and Chuck Marr ACA Repeal Would Lavish Medicare Tax Cuts on 400 Highest-Income
Households. Center on Budget and Policy Priorities, January 12, 2017 Available at: http://www.cbpp.org/research/federal-tax/aca-repealwould-lavish-medicare-tax-cuts-on-400-highest-income-households
13 Linda J. Blumberg, Matthew Buettgens, and John Holahan. Implications of Partial Repeal of the ACA through Reconciliation.
Washington, DC: The Urban Institute, December 2016. Available online at http://www.urban.org/research/publication/implications-partialrepeal-aca-through-reconciliation
14 Leighton Ku, Erika Steinmetz, Erin Brantley, and Brian Bruen. Repealing Federal Health Reform: Economic
and Employment Consequences for States. The Commonwealth Fund. January 5, 2017.
http://www.commonwealthfund.org/publications/issue-briefs/2017/jan/repealing-federal-health-reform
4
Peter S. Fisher is Research Director for the Iowa Policy Project. He holds a Ph.D. in economics from the University of
Wisconsin-Madison and is professor emeritus of Urban and Regional Planning at the University of Iowa. A national expert on
public finance, Fisher is frequently quoted in the Iowa and national media on issues involving tax policy and economic
development strategies. His critiques of various state business climate rankings are posted on a website, Grading the States,
at www.gradingstates.org.
Iowa Fiscal Partnership
The Iowa Fiscal Partnership (IFP) is a joint budget and tax policy analysis initiative of two nonpartisan, Iowa-based
organizations, the Iowa Policy Project in Iowa City and the Child & Family Policy Center in Des Moines. IFP is part
of the State Priorities Partnership, http://statepriorities.org, a network of nonpartisan organizations in 41 states and
the District of Columbia that share a commitment to rigorous policy analysis, responsible budget and tax policies,
and a particular focus on the needs of low- and moderate-income families. Iowa Fiscal Partnership reports are
available to the public at http://www.iowafiscal.org.
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