Iowa’s Top Insurer Delays Exchange Participation

Iowa’s leading health insurer will wait a year before participating in the state’s new health exchange due to concerns about problems that could arise with its implementation in the early going, company’s CEO said.

Wellmark Blue Cross and Blue Shield CEO John Forsyth said the company’s decision to wait until 2015 to join the exchange wasn’t financially motivated, and that even though the company will miss out on new customers who buy policies through the online marketplace, the company wanted to ensure it can continue offering the quality of service that it currently does.

“The primary reason, we didn’t feel we were going to be able to guarantee the quality of experience they are accustomed to with us,” Forsyth said. “We didn’t think the first few months would be very smooth.”

Six other companies have applied to participate in Iowa’s exchange, including two – Coventry Health Care of Iowa Inc. and CoOportunity Health – that would offer coverage to individual buyers throughout the state, Iowa Insurance Commissioner Nick Gerhart said. The other four companies have applied to offer plans with regional limits or that apply only to group insurance. No premium details were released.

June 30 was the deadline for insurance carriers to apply to take part in the exchange. Under President Barack Obama’s health care overhaul, all states must have a health exchange, with enrollment starting Oct. 1 and coverage on Jan. 1. Iowa will be partnering with the federal government for the exchange, where customers will be able to shop for coverage and qualify for subsidies and benefits.

Gerhart said in a news release that the state Insurance Division will spend the next month reviewing the plan proposals and will submit recommendations to the federal government by July 31.

Congressman Dave Loebsack, an Iowa Democrat who has been an avid backer of the Affordable Care Act, said he was disappointed about Wellmark’s decision to wait.

“I’m concerned in a sense that, the more insurance companies who are willing to participate, the better. Wellmark of course is very large here in Iowa. I’m disappointed that they decided not to participate immediately, but if they will participate down the road, I think that’s very good news,” Loebsack said following a Monday news conference in Coralville.

Republican Gov. Terry Branstad said he encouraged Wellmark to participate, but understands its decision.

“They did indicate their intention to participate in the future. We understand they made a decision which they felt was in the best interests of their company and their mutual shareholders,” Branstad said in an emailed statement.

Wellmark is Iowa’s largest insurance company. It covers about 285,000 members in Iowa who purchase health insurance directly from the company, or who get their insurance through small businesses with less than 50 employees. Wellmark insures roughly 1.7 million customers overall in Iowa.

Associated Press writer Ryan Foley in Coralville contributed to this report.