Governor Chet Culver is injecting himself in the middle of a dispute about Wellmark’s plan to raise the price of health insurance premiums by 18 percent, on average, for about 80,000 Iowans.
Culver has directed the state insurance commissioner to “stay” the premium increase. He’s calling for “a third party, independent actuary” to review the matter and determine whether the rate increases are justified. Rob Schweers, a spokesman for Wellmark, says his company doesn’t object.
“We intend to cooperate fully with the insurance commissioner in an independent, actuarial review of the data that supports our recent, individual rate increases in the individual, under 65 market,” Schweers says. “And by individual, we’re talking about people who buy their own policy as opposed to people who have a group policy through their employer.”
State Insurance Commissioner Susan Voss says the review should take less than 30 days — and it’s already begun. “We hired an independent actuarial firm out of Philadelphia that only does reviews for regulators, so there’s no conflict of interest,” Voss says. “They’ve done no work for (insurance) carriers.”
On Monday afternoon, Culver’s staff emailed a statement in which the governor called the premium rate hike “a disturbing and unwelcome suprise” for thousands of Iowans. The rate hike was scheduled to take effect on April 1, but Wellmark’s spokesman says it’ll be delayed.
“At the request of the commissioner, we have voluntarily agreed to postpone the effective date of the recent rate increases that we announced for 30 days,” Schweers says, “so instead of being effective April 1, they’ll be effective May 1 in order to provide the time for the independent review to be completed.”
The state insurance division had given Wellmark approval of their proposed rate increase. “Not everybody’s going to agree with what we do in our office. I mean, I have full confidence in our actuary. He’s certified. He meets all the credentials. But you know what? There’s nothing wrong with a fresh set of eyes looking at any filing and if we’ve made a mistake, we’ll correct it,” Voss says. “I don’t have a problem with that. That’s our job.”
Schweers says Wellmark stands by its rate-hike request. “It comes down to, at its core, that health care costs are rising faster than we’ve been increasing premiums, so that’s a function of not only the age of the state’s population and of different lifestyle and disease factors such as heart disease and diabetes, but the fact that we’re just getting a lot more services,” Schweers says. “The costs of the services are going up and we’re getting a lot more of them and that is driving up the overall cost of the health care that we pay for our members to receive.”
In his written statement, Culver said he wants to ensure “that any rate increases…are fair and completely justified.”
(This story was updated at 3:39 p.m.)