Iowa Actuaries: Wellmark’s Proposed Increase Too High

A proposed 11 percent rate increase by Wellmark Blue Cross and Blue Shield for Iowa customers who buy their own policies is too high, according to two experts who looked at trends in medical costs and services provided to the company’s customers.

The actuaries released their reports after a state hearing where several customers urged the state insurance commissioner to reject the increase.

Wellmark is Iowa’s largest health insurer, covering three-quarters of state residents who buy their own policies. The company raised premiums on individual plans last spring and then sparked an outcry when it announced in November that it wanted to raise rates again. Wellmark has said the increases are needed to keep up with the rising cost of medical care.

Iowa Insurance Commissioner Susan Voss, who must approve the request, has indicated her decision will be based on the actuaries’ reports.

One of the actuaries, Lewis & Ellis Inc. of Overland Park, Kan., said the rate increase should be 7.5 percent, The Des Moines Register reported.

The other actuary, who works for the state insurance division, said a 9 percent increase would be acceptable. Medical cost increases for customers in the main individual plans were less steep last year than in the previous two years, the state specialist said.

Those recommendations would affect 46,000 policies, many of which cover several family members.

Voss said she would talk to the actuaries to make sure she understood their conclusions, but she was not surprised they determined Wellmark’s request was excessive. Such assessments are fairly common and often lead to small requests, she said.

Under a state law approved last year, state insurance regulators must hold public hearings when companies propose rate increases.

Legislators approved the measure after Wellmark announced the 18 percent increase last spring.

Information from: The Des Moines Register

Topics Iowa