Iowa and South Dakota are the two states where the ACA insurance marketplaces have struggled the most. In both states, just 11.1 percent of residents eligible for subsidized insurance signed up for it — the lowest rates in all 50 states and the District of Columbia, according to data from the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)
What happened in Iowa and South Dakota? The answer lies in commerce, not politics.
The individual insurance market in both states is dominated by one insurer, Wellmark Blue Cross and Blue Shield. Wellmark BCBS chose not to sell on the ACA exchanges in the first year, locking out its consumers from buying subsidized plans from the company. And it has decided to stay out of the Iowa and South Dakota exchanges for Year 2.
Competitors claim that Wellmark BCBS is cleansing its risk pool by staying off the exchanges because “presumably” poorer, less healthy people would be there. The company counters that the federal end of the system is so problematic it prevents them from adequately serving their customers.
Wellmark BCBS cited technical problems with the back end of HealthCare.gov as a reason it is staying out of the market in 2015. A spokeswoman said data discrepancies in the enrollment process could affect consumer subsidies and eligibility.
“How data is transferred between the system, government entities and ultimately, health insurers continues to be problematic,” Wellmark BCBS Public Relations Manager Traci McBee writes in an email. “Because we rely on this information to serve our members, we need to ensure the information we receive is timely, secure and accurate.”
Wellmark says despite not selling on the exchange in 2014, it sold more ACA-compliant plans through its website and insurance agents than any of its competitors did in the two states.
That the company claims it can be more “timely, secure and accurate” with the federal bureaucracy out of the way seems like a…sane reason.