Dave DeWitte, CR Gazette –
The state has approved Wellmark Blue Cross Blue Shield’s request for a 9.35 percent increase in individual health insurance premiums.
The decision will mean rate increases of up to $45 per month for 70,000 individual Wellmark policyholders under the age of 66. They are a relatively smart part of Wellmark’s overall business, which is more heavily concentrated in group health insurance.
In a decision issued last week, the Iowa Insurance indicated that both an independent actuary, the Magnum Actuarial Group, and the Iowa Insurance Division Staff condluded the Wellmark rate hike is reasonable and justified under state and federal guidelines.
The report said overall medical costs reported by health insurance carriers in the state rose $68.8 million in 2010.
In 2010, it said the sales commissions for Wellmark Inc., the division of Wellmark that provides individual health insurance, were 4 percent. The administrative expenses for Wellmark Inc. were 9 percent.
Medical losses accounted for 86 percent of paid-in premiums of Wellmark Inc. in 2010, the decision said.
Wellmark’s application to boost premiums 9.35 percent prompted an outpouring of over 300 public comments, primarily from policyholders concerned about the affordability of their insurance.
Insurance Commissioner Susan Voss’ reaction to the comments was noted in the decision.
“This is not a decision she takes lightly,” the order said. “Thousands of Iowans will be impacted by this decision — many in a negative fashion.”
While noting the importance of a healthy population to a thriving state economy, the order said the balancing of the needs of Iowa consumers and the solvency of an insurance carrier must be weighed carefully.”
The decision also provided a briefing on the potential future impacts of the health reform law.
“Depending on how policyholders are pooled for rating purposes, some consumers could see large rate increases while others may see some rate decreases,” the order said.