The Iowa Insurance Division received an annual individual health insurance premium rate filing for Wellmark, Inc. plans compliant with the federal Patient Protection and Affordable Care Act (“ACA” or “Obamacare”) in May, 2016. Wellmark proposed an average rate increase of 42.6%, with variations by plan, effective January 1, 2017, for approximately 21,900 policyholders.
After review and analysis, the Division approved a rate increase of 42.6% Monday, August 29. Rates for 2017 were based on Wellmark, Inc. experience with existing individual business, and projected movement among or within the entire insured and uninsured population. The rate filings were reviewed to ensure compliance with ACA requirements and instructions from the Centers for Medicare and Medicaid Services of the United States Department of Health and Human Services (“CMS”), to ensure that the proposal is justified based upon the experience of the plans, and to ensure that the proposed rates can be expected to produce a medical loss ratio (“MLR”) of at least 80% for 2017.
The Iowa Insurance Division said, in conclusion, this it “is mindful” that several key provisions of the ACA impacted health insurance premium rates and pricing. The Commissioner, Nick Gerhart, studied the actuarial report, and consulted with various Division staff regarding the Wellmark, Inc. rate increase proposal. Whether to approve the rate increase is not a decision the Commissioner has taken lightly, the agency claims. “Many Iowans will be impacted by this decision. Balancing the needs of Iowa consumers and the solvency of an insurance carrier must be weighed carefully.”
The Commissioner finds that there is no evidence that the proposed rate filings are discriminatory or excessive under Iowa statute.
According to healthinsurance.org, five carriers have filed on-exchange rates and plans to be available in Iowa in 2017. According to the Iowa Insurance Division and Healthcare.gov’s rate review tool, the following average rate increases have been proposed:
- Aetna (formerly Coventry): 22.6 percent for POS, and 37.4 percent for HMO
- Avera (new to the exchange): 5 percent
- Gunderson (merging with Unity Health Insurance): 19.8 percent
- Medica: 19 percent
- Wellmark (new to the exchange): 35 to 45 percent, depending on plan; average is 37.8 percent
Monday, the Iowa Insurance Division approved rate increases for other participating insurance carriers: Aetna (22.6%), Gunderson (19.8%), Medica (19%) and Avera (5%).