Wellmark cleared to increase rates May 1

DES MOINES – An independent review ordered by Gov. Chet Culver of Wellmark Blue Cross-Blue Shield's proposed 18 percent rate increase has determined the higher premiums are appropriate and the company intends to move ahead with the higher health insurance premiums on May 1, officials said Monday.

The Iowa Insurance Division posted results of a secondary independent review conducted by Philadelphia-based INS Consultants on the agency's Web site that indicated the outside actuarial firm found Wellmark's proposed rate increases were justified based on anticipated lifetime loss ratios and higher incurred expenses.

“The analysis completed by INS concludes that the rate revisions comply with Iowa law and are within the appropriate guidelines for approval,” according to a memo sent from Iowa Insurance Commissioner Susan Voss to Culver. The consultants also found that the state's methodology for review also was appropriate.

Wellmark spokesman Rob Schweers said the results mean the 30-day stay that Culver ordered Voss to impose temporarily will be lifted and the planned premium rate increases will take effect on May 1. The proposed health insurance rate increases were to take effect April 1 affecting about 88,000 individual policy holders and about 154,000 total Wellmark members in Iowa, he said.

“At the time we were confident we were coming up with our premium rates the right way and so we're obviously pleased that the independent review bore that out. At the same time, no one is happy with a rate increase, including Wellmark,” Schweers said.

“Obviously, Iowans are concerned and Wellmark is concerned that the cost of care – if we allow to continue – is going to make insurance unaffordable to most Iowans,” he added. “Hopefully, the results of the review will cause people to say, OK, maybe beyond all the rhetoric, maybe there are some things that are contributing to higher costs and that, in turn, is what generates higher premiums.”

The implementation delay and cost associated with the independent review would have an impact on the company of more than $3 million, he added.

Schweers said he was hopeful the health insurance industry can work with various stake-holders, that include doctors, hospitals and consumers, to improve the health-care system in ways that will mean better quality of care, greater efficiencies and ultimately lower premium increases in the future.

In calling for the independent review and directing state regulators to stay Wellmark's rate increase, Culver said he did so out of concern shared by many Iowans that the proposed rate increase was “a disturbing and unwelcomed surprise.” As part of the review process, the governor asked that his office he provided an annual report that reviewed current trends in health-care costs and an analysis of how the costs associated with delivering services related to the amounts charged Iowa consumers by insurance companies.

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