“What we are trying to address is a really large number of people being priced out,” said Doug Ommen, the state’s Republican insurance commissioner. Two other states, Alaska and Minnesota, have already won permission to shore up their Obamacare markets with waivers allowed under the law; they will use federal money to help insurers cover the claims of their most expensive customers next year. But Oklahoma abruptly withdrew a similar request in late September — one that state officials said would have reduced premiums by an average of 30 percent — saying that the Trump administration had reneged on a promise to approve it by Sept. 25 and they were out of time. (A C.M.S. spokeswoman said, “At no time was an approval package or an approval date ever agreed upon.”) Iowa’s waiver request is more far-reaching, providing what Timothy S. Jost, an emeritus professor of health law at Washington and Lee University, has called a “watershed moment” for Obamacare. “It’s a decision to abandon a number of key principles of the Affordable Care Act,” he said. Under the law, people who don’t get insurance through work can buy it through the online marketplace. They get federal subsidies to help with the cost if their income is below 400 percent of the poverty level, or about $65,000 a year for a couple. Those whose incomes are below 250 percent of the poverty level — $40,600 a year for a couple — also get cost-sharing reductions. Iowa’s plan would reallocate much of that federal assistance, using it to provide premium subsidies based on age and income for even the wealthiest individual market customers. It would also be used to create a “reinsurance” program, like Alaska’s and Minnesota’s, to help insurers cover their sickest customers. The law’s essential health benefits and protections for people with pre-existing conditions would remain in place, but every individual market customer would get the same standardized high-deductible plan. Mr. Jost and other supporters of the law say Iowa’s proposal does not meet the requirements for so-called innovation waivers, including that the coverage they provide must be at least as comprehensive and affordable as Obamacare plans, because poorer people would face higher deductibles and other out-of-pocket costs. That, they say, leaves the plan open to almost-certain legal challenges. Seemingly acknowledging that problem, Mr. Ommen has tweaked Iowa’s proposal — including with a supplemental filing to the Trump administration on Thursday — to preserve subsidies that reduce out-of-pocket costs for roughly 21,000 low-income Iowans.
With efforts to repeal the Affordable Care Act dead in C.M.S. for now, a critical test for the law’s future is playing out in one small, conservative-leaning state.