Iowans should question Wellmark

The Des Moines Register

----

It's deja vu.

Wellmark Blue Cross and Blue Shield wants to raise premiums on some health insurance plans again. These are the policies purchased by about 75,000 Iowans who do not have coverage through an employer or Medicare.

Last year Wellmark sought an 11 percent increase. The year before rates went up 18 percent. Now it wants an average increase of 9.35 percent.

That doesn't mean the insurer will get it.

Unlike some states, Iowa regulators have authority on the cost of these “individual” health plans. Companies doing business in Iowa send requests for premium increases to the Iowa Insurance Division, which does one of three things: approves them, denies them or negotiates rates down. Last year the state agency reduced Wellmark's proposed rate increase on these policies.

The insurance division is charged with helping ensure that insurance companies remain financially solvent. But it must also take seriously the real world effect of its decisions on thousands of Iowa families already struggling in this economy.

Iowans should remind state regulators of that effect by attending a Dec. 10 public hearing on the proposed increase. Though not required, representatives from Wellmark should attend this hearing, too.

Then both the state and the insurer can hear comments and answer questions from members of the public.

What people should ask for: a more comprehensive explanation for why rate increases are needed.

Wellmark points to the usual suspects, namely people using more health services and receiving expensive tests and treatments. But is that true with these particular health insurance plans?

Individual policies tend to have high co-payments and deductibles. That discourages people from overusing health services. People don't rush to the doctor for every sore throat or undergo as many expensive tests when they have to pay more for such services. Also, insurers can refuse to sell these plans to the sickest (and most expensive) people. Wellmark has denied policies to many Iowans because they have preexisting health problems.

The company says the proposed increase has nothing to do with the health reform law. It is only paying doctors and hospitals a little more this year (1.7 percent and 2.7 percent, respectively).

Iowans should go to the hearing and ask whether losses in investment income are being offset by rate increases. Though Wellmark says none of the money will go toward administrative costs, Iowans should ask where that administrative money comes from. One way or another, the money insurers use to build buildings, process claims and invest, comes from customers' premiums.

Understanding the finances of a health insurance company and its proposed rate increases is no easy task. You need to be an actuary to grasp the intricacies of trying to predict expenses in a coming year.

Still, Iowans should ask questions and demand satisfactory answers. The public hearing is the place to do that.