Why health reform matters — especially in rural Iowa

Iowa’s 1.2 million rural residents need increased access to affordable, quality health insurance

2009-AC
Andrew Cannon

On the eve of her marriage, Suzanne Castello, a Grinnell resident, looked forward to quitting her job at a community college and working the family farm with her husband full time.

Though Castello had enjoyed good health benefits at her off-farm job, her husband had been covered through an insurance plan purchased on the non-group, private market for a number of years, and they assumed that adding her to the plan would not be a problem.

Due to a previous miscarriage and a chronic jaw ailment, Castello was denied coverage. Around the same time, Castello and her husband learned that she was pregnant. The Castellos continued to search for an insurance plan that would cover her and had some luck, though the plans that would agree to cover her had a 10-month pre-existing condition exclusion — no insurer would cover the pregnancy.

Castello enrolled in COBRA — the federal legislation that allows workers to continue their job-based coverage for up to 18 months, COBRA enrollees must pay 102 percent of the premium cost.

“We were hemorrhaging money, but we didn’t qualify for Medicaid,” Castello said. “It really rankles me that we’re seeing something as fundamental as childbirth as kind of like, ‘Would you like dessert with that meal?’ There’s a double-standard between group policies and individual policies, which cover most farmers.”

Though the pregnancy was complication-free and Castello has enjoyed good health since then, finding affordable insurance is still a challenge for her.

“Right now, I have the flavor-aid version of an insurance policy – it’s high-deductible, high cost-sharing. It’s basically just coverage for catastrophic events, because the deductible is so high,” Castello said.

“It’s irksome that I’m a healthy person and I can’t get decent health insurance.”

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Nearly 20 percent of America’s uninsured live in rural areas. Of those, if they do not have insurance through an employer-sponsored plan or public coverage, such as Medicaid, they have to buy a plan on the non-group market. This is especially expensive, as the costs are not spread across a larger group of employees and their families.

Nationally, only 8 percent of the population receives its insurance through the non-group market. In Iowa, up to 37 percent of rural residents get insurance this way, subjecting them to high premiums for less-regulated plans that can deny coverage for a pre-existing condition for up to 12 months.

Iowa’s 1.2 million rural residents need increased access to affordable, quality health insurance.

Posted by Andrew Cannon, Research Associate.

See Cannon’s IPP Snapshot: Health coverage in rural Iowa.

Workforce Education: Good investment for Iowa

No matter the indicator — unemployment rates, wages or poverty — it is undeniable that education pays for Iowans.

Lily French
Lily French

Investments in workforce education improve economic prospects for Iowa families, and in the process boost the state budget. We have found that investing in postsecondary education for low-income adults returns tax revenue more than double the state’s costs. In fact, the state can garner $3.70 in increased tax revenue for every dollar invested in an associate’s degree and $2.40 for every dollar invested in a bachelor’s degree for low-income adults. (See Education Pays in Iowa, Executive Summary; Full Report)

State investments in workforce education can also greatly improve the economic futures of Iowans struggling to support their families. No matter the indicator — unemployment rates, wages or poverty — it is undeniable that education pays for Iowans. In a state where wages are stagnating for less-educated workers, many Iowans were having a difficult time making ends meet even before the current recession began.

Further, a projected shortage of skilled labor combined with the rising cost to families for postsecondary education demands that Iowa invest in workforce education to address our state’s education gap. When low-income adults have access to increased education and training, their lifetime earnings increase substantially, generating tax revenue for the state that more than offsets the cost of investing in this access.

To garner the largest fiscal returns and set the state firmly on the path toward economic growth, Iowa should:

■ Expand financial aid to help low-income working adults pay for postsecondary education, by

  • creating a tuition scholarship program for low-income workers to pursue an associate or bachelor’s degree at one of Iowa’s public colleges;
  • fully funding Iowa Work-Study at its standing-limited appropriation of $2.75 million.

■ Promote education and training within Iowa’s TANF program, by

  • directing program administrators and case managers to promote education with Promise Job clients;
  • using American Recovery and Reinvestment Act (ARRA) TANF Emergency Contingency funds to support education and training for a greater number of TANF participants.

■ Modify Iowa’s WIA plan to enhance training provisions, by

  • setting local funds for training at minimum level required for eligibility to additional discretionary funds;
  • using discretionary funds to advance postsecondary educational opportunities.

Expanding access to education and training for low-wage workers is particularly important when economic prospects are dim. An investment in workforce skills would prepare Iowans for the future and contribute to rebuilding our economy.

Posted by Lily French, Research Associate/Outreach Coordinator

Excerpted from Lily’s written testimony to the Iowa legislative Job Training Needs Study Committee, Nov. 3, 2009. Also see the IPP backgrounder.

We don’t have luxury of avoiding climate change response

Putting a price on greenhouse gas pollution would create a bigger market for renewable energy and energy efficiency.

Teresa Galluzzo
Teresa Galluzzo

Challenged by a down economy, two wars, and the need to fix our health care system, Congress might want to push other issues to the wayside. But Congress doesn’t have that luxury. Another very critical issue needs our attention: our action plan to address climate change.

Crafting legislation to reduce our contribution to climate change would also play a role in addressing today’s other immediate needs. Putting a price on greenhouse gas pollution would create a bigger market for renewable energy and energy efficiency. The jobs and industries created for developing clean energy technologies would help get the U.S. and Iowa economy back on track.

The American Council for an Energy-Efficient Economy recently estimated the climate-change legislation passed by the House would net Iowa 4,000 new jobs in 2020 and nearly 6,000 jobs by 2030.

Likewise, the Center for Rural Affairs looked at the job creation potential of requiring that 20 percent of electricity be generated by renewable energy before 2030. That research found that the wind energy developed in Iowa to meet this standard could create over 9,000 permanent jobs and over 60,000 temporary construction jobs in Iowa.

The benefits reach beyond job creation. Reducing our reliance on foreign fossil fuel sources is critical to national security and preventing future conflicts over energy and those that would result from the human tragedy associated with the worldwide impacts of climate change.

Furthermore, preventing the more frequent occurrence of catastrophic heat waves, flooding and drought anticipated for Iowa — if we continue emitting large amounts of greenhouse gas pollution — would go along way toward improving our health.

Addressing climate change is urgent work and must it stay on Congress’ long to-do list. We can’t continue business as usual for our economy, security or health. We can do better, and responding to the challenge of climate change is the way forward.

Posted by Teresa Galluzzo, Research Associate

Don’t lose focus during film-credit probe

Hopefully the coming attractions will hold the attention of Iowa policymakers and the public as much as the feature now playing.

As the Iowa Fiscal Partnership (IFP) notes in a statement today, Iowans must follow more than the investigation of the state’s film-credit program and a report from a consultant about its operation over about six weeks.

Iowa’s entire tax-credit buffet for businesses demands scrutiny — especially when the Governor is anticipating budget cuts. Any considertion of spending cuts must put all spending on the table, including spending through the tax code. According to IFP:

These are terribly difficult budget times for the state of Iowa. Everything needs to be on the table, including indirect spending through the tax code. The film credit program needs every bit as much scrutiny as other spending, but so do all tax preferences to businesses. We have been heartened by the call of Governor Culver and others, including some of the state’s leading newspapers to seek a full review of more than just the film tax credit. The governor and state legislators must follow through to assure taxpayers are getting a good deal when we tell some firms that they need not pay taxes.

Iowa policy makers must recognize the problems with accountability that this investigation has exposed. We just don’t know enough about what state tax money is being used for, and that’s a problem with more than the film credit. As we have shown, and as Department of Revenue research has confirmed, Iowa hands millions of dollars every year to big corporations through the research activities credit. But the recipients, and the use of the money, have not received scrutiny from the legislators who have allowed this to happen.

We must not miss the overarching policy questions by limiting new oversight only to the film credit. All Iowa tax credits should be on the table with other spending choices, not just the film credit program.


“Follow-through” is the operative concept in the IFP statement. The Governor and the General Assembly took two important steps at the end of the last legislative session to promote better transparency and accountability for tax credits. They approved legislation to (1) cap a package of certain tax credits managed by the Department of Economic Development, including the film credit, at $185 million; and (2) to assure a public report on recipients of Research Activities Credit subsidies of more than $500,000, and amounts, to provide scrutiny while not hindering competitiveness for those recipients.

Taxpayers deserve to know how public money is being spent. Plans for a full review of tax credits is essential for sound fiscal decisionmaking.

Posted by Mike Owen, Assistant Director

Iowa Fiscal Partnership supports suspension, investigation of film credit program

A critical problem with Iowa tax credits is a lack of transparency.

Governor Culver acted responsibly Friday by ordering a suspension of the state’s film tax-credit program pending further investigation of irregularities in the management of the program.

A critical problem with the film credit and many other economic development tax advantages offered to industry by the state of Iowa is a lack of transparency. State lawmakers and the public for the most part have no idea whether current tax breaks — which are typically granted as corporate entitlements — are actually performing as intended.

The initial investigation has exposed the film credits, as currently in place, as a boondoggle that is draining our state treasury. Further, this is coming at a time when our state leaders are anticipating budget cuts. All spending — including spending through the tax code — needs to be on the table when considering cuts to the budget.

Those taking advantage of apparent lax management of the film-credits program may indeed be ruining it for other filmmakers who have not done so. Nevertheless, there is no justification for continuing this program while all the problems with it are being sorted out, and while education and fundamental human services are threatened with budget cuts.

[The Iowa Fiscal Partnership is a joint budget and tax policy analysis initiative of two Iowa-based nonprofit, nonpartisan organizations, the Iowa Policy Project in Iowa City and the Child & Family Policy Center in Des Moines.]

Numbers, numbers, numbers … People!

It’s a familiar refrain in the office each month when we put together our analysis of Iowa’s latest job numbers: There sure are a lot of numbers!

That’s an understandable reaction. Too many numbers can obscure the message, something we consider in our analysis of public policy issues at the Iowa Policy Project.

So, we try to strike the right balance. How many numbers do we need to tell the story — accurately and in context?

Goodness knows these days, too many people out there will torture numbers to extremes if it helps their message. We prefer to review the numbers and then figure out what the message should be.

This month, as IPP Executive Director David Osterberg noted in his comments in our news release, “Good news is hard to find in these numbers.” There was only a 200-job loss in nonfarm jobs in August — but even that good news came with a major downward revision in the previous month’s numbers. July’s job loss, previously reported at 2,400, is now recorded at 4,400.

Iowa payroll jobs have dropped in 11 of the last 12 months
Iowa payroll jobs have dropped in 11 of the last 12 months

Furthermore, those numbers show Iowa:

  • has lost payroll jobs in 11 of the last 12 months. (See graph at right.)
  • has shown a net loss of 49,400 nonfarm jobs in that same period — 28,000 of them in manufacturing.
  • has seen its unemployment rate jump to 6.8 percent in August from 4.2 percent a year earlier (an increase of over 60 percent).

And we could go on, with lots more numbers. And as long as they help to tell the story, we will do that.

But they will only tell the story if we always keep in mind that those numbers represent people — Iowans, our friends and neighbors — and the places they can go to work and support their families.

We can’t wait until those numbers start looking better, month after month. That will make it a little easier when we look at our first draft and say, There sure are a lot of numbers!

Posted by Mike Owen, Assistant Director

A view of IPP research, from a researcher

Molly Fleming
Molly Fleming

As I begin my final year at the University of Iowa’s graduate program for Urban and Regional Planning, I have been fortunate to join the Iowa Policy Project as a part-time research assistant. This opportunity allows me to integrate my interest and experience in public policy with fact-based research and analysis. Given public confusion and misperception regarding such critical issues as health care, taxes and the environment, objective research is vital to ensure government accountability and citizen engagement. I am very pleased to be able to assist in this important work.

As a volunteer at the Iowa Policy Project last spring, I helped former research associate Beth Pearson to determine the benefits of home weatherization for low-income Iowans. Additionally, I helped to compare how alternative versions of climate change legislation could promote or harm public welfare. The research skills I gained from this experience have been invaluable, and I hope to build upon them throughout the coming year.

Under the guidance of Peter Fisher and other members of the wonderful IPP staff, I will look at the effects of the American Recovery and Reinvestment Act on Iowa’s economy. I also plan to take a hard look at Iowa’s budget allocations throughout the year and the rising cost of living within our state. It is my hope that this research will help to spark good ideas and influence important public policy. As the challenges and prospects facing Iowans evolve during this time of economic uncertainty, the Iowa Policy Project’s work is more important than ever. I am both honored and excited to be a part of the IPP at such an exciting time, and I look forward to my year here.

Posted by Molly Fleming, Research Assistant