The Iowa Insurance Department won't allow Wellmark Blue Cross and Blue Shield to increase its premium rates by 11 percent as it proposed, but has approved an 8.5 percent increase instead.
Commissioner Susan Voss, who listened to or read the comments of hundreds of outraged customers, said Wellmark could raise the rates an average of 8.5 percent starting in April. She based her decision on the opinions of two actuaries, who determined the request for an 11 percent increase was excessive. One of the actuaries, Lewis & Ellis, said the rate increase for most individual policyholders should be 7.5 percent. The other actuary, who works for the state insurance division, said the increase should be 9 percent, the Des Moines Register reports.
Wellmark said it respected the process by which Voss made her decision. "We understand the commissioner's concern, for example, about carriers leaving the Iowa individual health insurance market. Wellmark, in fact, has lost money in this market three of the last four years." However, it added that its rate request was justified based on rising healthcare costs and its members' projected use of healthcare services in the coming year. The insurer pledged to continue working with the Iowa Insurance Division.
"Given the overall financial strength of Wellmark and the concerns by the Division that underlying healthcare costs continue to increase, it was felt that a more reasonable rate increase was somewhere between 7.5 percent and the 9 percent proposals provided to the Division," Voss said, according to the National Underwriter.
Voss also said the department will conduct a company examination of Wellmark to see if it is holding appropriate capital in relation to its risk. The probe will look at the effect smaller insurance carriers leaving the market in Iowa has had on Wellmark's market share, notes WHO.
"We think the time is right for a careful professional analysis of these two additional areas. We gained valuable insights from the extended review just completed that allowed us to arrive at the appropriate level of permitted rate increase. Learning more facts on these points will be useful in future considerations of rate adjustments," Voss said, according to the Register.
Wellmark faces criticism, opposition to rate hike at public hearing
Increases in healthcare premiums may be here to stay
Anthem, Regence denied rate hike requests