An Iowa insurance company is objecting to the extension of insurance policies in the state that don't comply with the standards of the Affordable Care Act.
An official for CoOportunity Health said Tuesday that extending the policies essentially would create two unequal marketplaces and raise prices in both.
The Obama administration announced last week it would allow state insurance commissioners to extend non-compliant policies for two years.
The announcement came after a political firestorm over the cancellation of insurance policies across the country because they did not meet the standards of the new law.
The Obama administration has scrambled to accommodate the policyholders. It extended the policies for a year last fall, and last week, allowed for extending them for another two years.
Critics said the move was made to shield Democrats vulnerable on the issue in the fall elections.
In Iowa, the decision raises the possibility that tens of thousands of Wellmark Blue Cross and Blue Shield customers could see their non-grandfathered policies extended.
A spokesperson for the company said last week it would be willing to extend the policies if the state allowed it.
Currently, the policies are slated to expire toward the end of the year. Wellmark controls nearly 90 percent of the individual insurance market and much of the small-group market.
"It's very bad public policy," said Cliff Gold, chief operating officer for CoOportunity Health, which has enrolled more than 18,000 Iowans in coverage as of late February.
The company has met with the state insurance division about the matter.
Gold said last year's decision to allow extension of the policies for a year came amid a unique set of conditions, including a non-functioning website, which don't exist now.
"The grandfathering of those plans for any additional time is not based on anything other than political considerations," he said.
Gold said people "could be paying less for better coverage if they shopped." However, extending the policies could convince people to stay put.
At the least, the same rating criteria ought to be used for the policies, he said.
The Affordable Care Act requires a package of minimum benefits. It also now forbids such practices as medical underwriting, in which insurers inquire about an applicant's health history and then can deny coverage or charge higher amounts for it. There also are tighter restrictions on varying price by age.
CoOportunity and Coventry Health Care of Iowa are the two firms that are selling policies statewide in the Affordable Care Act's marketplace.
Rohan Hutchings, a spokesman for Coventry, said in an email Tuesday the company generally supports efforts to renew existing health plans "in areas where it makes sense."
"There are, however, a number of questions that need to be answered before we know how HHS's revised guidelines will impact our customers," he said. "We are working closely with Iowa and other state regulators as they evaluate whether or not to allow this proposed extension and the impact to local employers and members."
Tom Alger, a spokesman for the insurance division, said Tuesday the state insurance Commissioner Nick Gerhart has not reached a decision yet but is studying the matter.
"Most carriers have already shared their opinions, with varying degrees of differences," Alger said in an email.He said some individuals have shared their opinions, too. They have been "unanimous in advocating for their ability to remain with their existing plans," he said.