Iowa Likely to Reject Health Insurance Mandate

A bill mandating nearly all Iowa children have health insurance is currently facing an uncertain future. Senate File (SF) 2390 would provide subsidies to families with annual incomes between 200 percent and 300 percent of the federal poverty level ($62,500 for a family of four).

The bill would require all parents to provide proof of qualified health coverage for their children by January 1, 2011. The bill also would create a new state board with the mission of enrolling eligible children in Medicaid and Hawk-I, the state's health coverage program for children in low-income families.

Stiff Resistance To Iowa Health Insurance Bill

Despite being approved by an 11-2 vote of the State Senate's Human Resource Committee, the bill is meeting stiff resistance. Aside from the expense of the plan, estimated at between $20 and $25 million in the first year, some advocates and legislators argue an individual mandate of any kind is a non-starter in the state body--even if it applies only to children.

"Iowans are philosophically in a different place than that," said state Rep. Dave Heaton (R-Mt. Pleasant), ranking member of the Health and Human Services Appropriations Subcommittee.

Heaton added he believes a mandate is unnecessary, pointing out, "In Iowa, 97 percent of our children are covered."

Heaton expressed doubts about the measure's likely effectiveness, though he acknowledged the rising cost of care is a serious concern and said he supports a House bill intended to increase quality and access while curbing costs.

Tenuous Position

The House version of the bill, unanimously passed on March 11, includes provisions mandating modernization of medical record-keeping and prescription systems, ensuring workers can maintain their health plans when switching jobs, and providing incentives to promote wellness and chronic disease prevention.

The Senate bill includes those provisions plus Iowa Gov. Chet Culver's (D) proposal to incorporate means testing as a way to allow more Iowans to purchase Hawk-I coverage for their children, plus provisions mandating universal coverage and creating additional health care bureaucracy.

During times when the state budget is tight--such as the present--the subsidies authorized under SF 2390 would be provided as scarce state funds become available. The expense of the measure's combination of new regulation and programs and the unpopularity of the mandates have combined to put the Senate bill in a tenuous position.

Unintended Consequences

In 2005 Massachusetts passed a law requiring all residents to be covered by a state-approved health care plan or pay a fine. Residents who could not afford insurance were subsidized on a sliding scale. However, unexpectedly high costs and low compliance rates have plagued the program. To date, no other state has followed the Massachusetts model.

Robert Stewart, a medical doctor practicing in Iowa since 1975, says he would like to see all the state's children covered by some kind of health insurance, but he cautions further state intervention could have unintended consequences. "So often states start piling on mandates, driving up the price of care," he noted.

Stewart said he is in favor of several measures to reduce the cost of care, including legislation allowing individuals and small businesses to enter group markets. "People want health insurance; the problem is the price," he said.

The Iowa House bill does not include a health insurance mandate or an expansion of Hawk-I, and thus it is seen as far more likely to attract significant future bipartisan and bicameral support than its Senate counterpart.

Heaton went a step further, declaring the Senate bill "dead" and stating he doesn't see legislation containing a health insurance mandate passing in Iowa any time soon.

"You can't sell them [mandates] over here," Heaton said.