Democrats on a Senate committee have advanced a bill that would give the state insurance commissioner authority to order rebate to customers if an audit of Wellmark Blue Cross Blue Shield reveals the company has too much cash in reserve. Senator Jack Hatch, a Democrat from Des Moines who is running for governor, is touting the bill.
“Let’s just say that there was a determination there was excess reserves,” Hatch says. “Right now the commissioner has no authority to require the company to do anything with that. (It’s) totally up to the company.”
Wellmark lobbyist Frank Stork points to a 2011 audit which concluded Wellmark’s reserves might have been too low to cover future risks.
“And there’s currently one underway,” Stork says, “so I think at a minimum you’d want to wait and see what the current audit indicates.”
Stork says the company has “reasonable” reserves. Wellmark opposes the bill. Republican legislators argue it’s not the state’s role to tell a private company how much cash to keep in reserve. Over 1.8 million Iowans are covered by a Wellmark health insurance policy. According to the company’s website, Wellmark held over $1.3 billion in reserves in 2012.
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