High claims costs justify a move by a Midwestern health carrier to raise rates for 80,000 enrollees an average of 18%, according to an actuarial consulting firm.

Iowa Insurance Commissioner Susan Voss has described the findings of the firm, INS Consultants Inc., Philadelphia, in a letter sent to Iowa Gov. Chet Culver, D, and Iowa’s lieutenant governor.

Voss asked INS to review health insurance rate increases requested by Wellmark Blue Cross and Blue Shield, Des Moines, Iowa, earlier this year, after Congress began looking into reports of insurers in California and elsewhere demanding high rate increases.

Sen. Charles Grassley, R-Iowa, who presides with Sen. Max Baucus, D-Mont., over the Senate Finance Committee, wrote to ask John Forsyth, chairman of Wellmark Blue Cross and Blue Shield, Des Moines, Iowa, why Wellmark was planning to impose 18% rate increases on 80,000 of its 1.8 million customers starting April 1.

INS works only for insurance regulators, not for insurers, and it found that the Wellmark rate increase request was justified because the loss ratio for the policies in each block was over 100%.

Rates on several of the blocks of business have not been increased for several years, Voss writes.

“The analysis completed by INS concludes that the rate revisions comply with Iowa law and are within the appropriate guidelines for approval,” Voss writes.

***

More information about Wellmark rate increase request is available here, at “Grassley Asks Iowa Carrier To Explain Rate Increases”