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Health Reform Benefits for Iowans

February 9, 2010

While the health reform has continued to stall in Washington, people around Iowa still want reform passed, and cannot wait much longer…

  • Over 282,000 Iowans were uninsured in 20 08, and due to recession-caused job losses in 2009, this number of uninsured Iowans has most likely grown.
  • Not just low-income Iowans are struggling to get health insurance: working Iowans, small business owners, and rural Iowans are among the groups that find getting affordable health insurance particularly difficult.
  • Over 72 percent of uninsured Iowans worked at least part-time during 2008, with 34.5 percent having worked full-time.
  • For small business owners  and employees, health insurance premiums rose 113 percent from 1999 to 2009 As a result, fewer and fewer small businesses offer health insurance benefits.
  • Some 85 percent of small business owners in Iowa reported that they simply cannot afford health insurance coverage.  The damaging effects of rising premiums and rising health care coverage costs are felt even more in a recession when small businesses are cutting back on costs.
  • In rural Iowa, where small business dominates the economy, the particular problem of small businesses not being able to provide insurance benefits to employees is more evident.  Health insurance premiums for small businesses are on average 18 percent higher than for large firms. For Iowa’s 1.2 million rural residents, this is a huge issue.
National health reform would help alleviate many of these problems by expanding existing public health insurance programs like Medicaid, creating health insurance purchasing pools known as exchanges to more effectively pool health risk, and providing low- and moderate-income Iowans with subsidies to purchase health insurance.
All Iowans – whether they’re small business owners, small business employees, or rural residents – deserve access to affordable and quality health insurance.
For more information and research related to how Iowans will benefit from national health care reform, please check out these recent backgrounders and issue briefs:

Rural Iowans and Health Insurance Coverage

Iowa’s Health Insurance Shortage

Health Insurance Exchanges

Small Businesses and Coverage

Or check out other related materials from the Iowa Policy Project

Though the national health reform debate has been a long battle, and has seen some major setbacks, it is more important than ever that a comprehensive health reform bill be passed.

Yet in light of some political setbacks, some critics of reform are calling for a piecemeal approach to reform, suggesting that Congress pass only certain provisions of the bills passed by the House of Representatives and the Senate, such as requiring insurers to cover all patients regardless of medical history or requiring all individuals to obtain health insurance.

Though it sounds attractive and like a step forward, a piecemeal approach to health reform is destined to fail.

If legislation required insurers to cover all individuals regardless of health status without any other reform provisions, we could see what health policy experts call a death spiral. As insurers were required to cover everyone, regardless of their health status, the average person’s premium, even if they’re already have health insurance coverage, will likely rise even faster, as insurers will have to cover the costs of insuring the sick and those with chronic conditions. As premiums rise, health individuals would begin to opt out of health insurance, deciding that the high premiums simply are not worth it. This would leave insurers with an even unhealthier pool of the sick and those with chronic conditions, further increasing premiums.

Similarly, though requiring all individuals to purchase insurance sounds like a good idea, in isolation the practice would be impossible. Too many people are unable to qualify for insurance due to pre-existing conditions, and many others are unable to afford insurance, either because of high premiums as a result of their pre-existing conditions or their moderate income. Without some sort of mechanism to require insurers to cover all and assistance to low- and moderate-income families to purchase insurance, the individual mandate simply could not work.

Health care is a complex system. Tweaking one cog alone simply won’t do the trick. Iowans and Americans need comprehensive health reform to ensure that all have access to affordable, quality health care.

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