Iowans will have a new option for health insurance coverage in the individual market next year with the entry of Medica Health Plans, a Minneapolis-based regional health insurer that serves the Upper Midwest.

Medica announced today that it will begin offering coverage both on and off the Iowa Health Insurance Marketplace for the 2016 plan year, which will provide what insurance brokers say is much-needed competition for Wellmark Blue Cross and Blue Shield in the Iowa market.

What impact could Medica  have in Iowa?   An executive with Medica Health Plans talked with Senior Staff Writer Joe Gardyasz about the volatility the Minnesota company has seen in its other Midwest markets, and why it believes it will shake up the Iowa individual market. Also, read some insight from a West Des Moines-based insurance broker about some unique products Medica offers – and the outlook for group offerings by Medica.Read more >>>

“Medica is thrilled to bring new choices in health insurance to Iowa,” said Dannette Coleman, senior vice president and general manager of individual and family business. “Our plans are easy to understand, and we believe Iowans will benefit from shopping and the options available to them.”

The company confirmed that Omaha-based Midlands Choice will serve as the provider network for its individual health plans. Midlands Choice, which had been the provider network for CoOportunity Health members before that cooperative health plan failed earlier this year, has a provider network that includes 100 percent of the hospitals and 97 percent of clinicians in Iowa and Nebraska, and travel coverage throughout the U.S. is offered as a standard feature.

Medica’s announcement comes just days after Wellmark Blue Cross and Blue Shield announced it would not be selling individual health plans on the Iowa marketplace in 2016; the Des Moines-based insurer has stayed off the government exchange for the past two years. Wellmark also announced it would seek a 28 percent increase in rates for plans subject to the Affordable Care provisions after experiencing health claims that were double what it had expected.

Coleman said her company is focused on Iowa’s individual market for now and has not considered if it will enter the group market in the state. “We’ve been so focused on individual; really that has not been a focus of our analysis yet,” she said. The company will not immediately have an office presence in the state, she said.

The nonprofit company has approximately 1.5 million members in Minnesota, North Dakota, South Dakota and Wisconsin. It provides coverage in the employer, individual, Medicare and Medicare Part D markets. Medica also offers national network coverage to employers who also have employees outside its regional network.

“I think it’s great news,” said Rick DeBartolo, senior vice president of LMC Insurance & Risk Management in West Des Moines. “Anytime we have competition in the market, it’s good for the consumer. … We need more options on the public exchange.”

Iowa has one of the lowest adoption rates in the country among people who are eligible to buy individual insurance coverage through the online marketplace, which provides an opportunity for Medica. “We think we can help improve that,” Coleman said.

According to the Kaiser Family Foundation, just over 29,000 Iowans, or 13 percent of the 224,000 eligible, purchased their coverage through the marketplace in 2014. On average, about 28 percent of Americans who are eligible to purchase through the exchange have done so, according to the foundation.  

“We are strong believers that competition is a very good thing,” Coleman said. “It’s good for consumers but also good for us as a company — you’re more on your toes when you have competition.”