Insurance premiums for some state health plans to increase

DES MOINES – Premiums for some state employee health-care plans administered by Wellmark Blue Cross/Blue Shield are slated to increase by up to 11.2 percent next year, state elected officials were told Monday.

Ed Holland of the state Department of Administrative Services said Wellmark rates increases for state health plans ranging from 10.7 percent to 11.2 percent mirrored national trends toward increased costs, utilization of services, a higher prevalence of chronic diseases, and an aging workforce. Dental premiums are slated to increase by 3 percent for 2010.

Overall, the state contribution for health, dental, life and long-term disability insurance plans are slated to increase from nearly $332 million this year to nearly $349.6 million in 2010, Holland said.

Employee contributions will vary based on plan participation and some union-represented employees had their family heath-care premiums frozen for six months through next June 30 as part of a collective bargaining agreement that included a base pay freeze for fiscal 2010, Holland added. He said the proposed higher insurance premiums likely would impact about 28,000 employees who will have until Oct. 23 to enroll in the 2010 program – raising monthly premiums from $230 currently to $255 per month after July 1.

Wellmark initially provided an initial renewal projection that required overall rate increases of 17.3 percent to 25.2 percent for active state employees, but after numerous discussions with state officials and their consulting advisor agreed to lower those figures to 10.7 percent to 11.2 percent, Holland told members of the Iowa Executive Council.

Iowa Agriculture Secretary Bill Northey and Iowa Secretary of State Michael Mauro – both Executive Council members -- questioned the proposed spike in health-care premium rates following a year in which increases ranged from 1-2 percent and held in the 5-8 percent range the two previous years.

Mauro and Northey cast dissenting votes when the council decided last year to drop one of the health insurance options – United HealthCare -- for state employees due to their concern that the lack of competition would lead to higher costs later.

“The flags are out here all over the place,” said Mauro, in getting the council to agree Monday to defer action on the Wellmark insurance premium rate request pending more information.

Proponents of the Wellmark-only approach had argued that state costs could be reduced by rolling various rates in a comprehensive package offset by cheaper insurance options. Holland said Monday the proposed premium rate increases were the product of market changes and cost pressures rather than a lack of competitive bids.