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Iowa Regulator Rules on Health Rates

by Allison Bell

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Iowa Insurance Commission Susan Voss lowered one health rate increase that a carrier requested and let another proceed as filed.

Wellmark Blue Cross Blue Shield, a unit of Wellmark Inc., Des Moines, Iowa, applied in November 2010 for permission to apply a 10.8% base rate increase to 3 pools of policies.

Wellmark also applied for a 15% base rate increase for a “Blue Transition” group conversion policy.

The Iowa Insurance Division has looked at actuarial reviews, considered public comments, and decided to cut the 10.8% base increase to 8.5%, Voss writes in a letter announcing the Wellmark rate decisions.

The division will approve the 15% Blue Transition increase without changing it, Voss says.

An independent actuarial firm had suggested cutting the 10.8% increase for the 3 pools to 7.5%, Voss says.

“Given the overall financial strength of Wellmark and the concerns by the Division that underlying health care costs continue

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to increase, it was felt that a more reasonable rate increase was somewhere between 7.5% and the 9% proposals provided to the Division,” Voss says.

Several carriers have left Iowa, and the division would like to see that Iowans have access to enough different health carriers, Voss says.

The division will hire outside consultants to review the overall market strength of Wellmark and determine if the rate review ends up causing any problems for Iowa consumers, Voss says.

Wellmark, a policyholder-owned mutual insurer, has put out a statement expressing its respect for the Iowa rate review process.

“Wellmark believes its rate request was justified based on rising health care costs, and our members’ projected use of health care services in the coming year,” the company says.

Wellmark has lost money in the individual health market during 3 of the last 4 years, the company says.