Wellmark Blue Cross-Blue Shield recently announced premium increases averaging 18 percent for about 80,000 policy-holders. Tens of thousands of customers were facing rate hikes of 22 percent, effective April 1.
Today Governor Chet Culver halted the planned increases by Iowa's largest health insurance provider. Details are after the jump.
Governor Chet Culver today called for Wellmark to justify the 18% health insurance rate increase to the 80,000 Iowans affected. In a letter sent today to Insurance Commissioner Susan Voss, the Governor directs her office to stay the recently-announced insurance premium increases awarded to Wellmark Blue Cross-Blue Shield until a third-party, independent actuary can review the file and determine whether the Division's processes used to award Wellmark the premium rate increases is justified.
"I share the concerns of many Iowans that the recent health insurance premium rate increases are a disturbing and unwelcomed surprise," said Governor Chet Culver. "I am directing Insurance Commissioner Voss to take several actions that are intended to provide additional protections for the interests of Iowa health insurance consumers.
The letter outlines four directives for the Insurance Commissioner:
1) Hire a third-party certified actuary, independent of any financial relationship with Wellmark Blue Cross-Blue Shield, to conduct a secondary review of Wellmark's recently-approved request for health insurance premium rate increases that are now scheduled to take effect on April 1, 2010. Commissioner Voss is to take all necessary action to stay the recently-approved increases at least until such time as the third-party review has been completed and published for review by your Commission and by the public.
2) An independent, qualified third-party actuary to conduct a secondary review be utilized whenever any health insurance company that conducts business in the State of Iowa submits a health insurance premium rate increase request to your division.
3) Seek any other practical ways to inform and educate Iowans and our Office and members of the Iowa General Assembly about the rate review processes and the relationship between Iowa's health care costs.
4) Provide to the Governor's office an annual report, to be delivered no later than November 15 of each year. Please include in that report a review of current trends in health care costs, in general, and those in Iowa, in particular, with an emphasis on how the costs of delivering health care services relate to the amounts charged by health insurance companies to Iowa's consumers.
IowaPolitics.com published the full text of Culver's letter to Voss.
Does anyone know if there is precedent in Iowa for staying a health insurance company's rate increase? I wonder who will be selected to conduct this independent review. I will update this post as I learn more about this order and whether other states have halted health insurance premium increases following actuarial reviews of this kind.
The Des Moines Register's business editor, David Elbert, provided Wellmark's side of the story in this piece, which depicted the insurer's rate increases as reasonable and justified.
UPDATE: I forgot to mention that Senator Chuck Grassley has asked Wellmark to justify this year's rate increases, which followed increases of about 9 percent in 2009.
Also, Democrats in the Iowa legislature are drafting a bill to "bring more accountability to insurance companies by ensuring consumers have access to information on health insurance plans, premium rate increases, and health care cost information."