Governor Chet Culver has taken an unusual step, trying to “halt” premium rate increases for those insured by Wellmark. UPDATE: Wellmark isn’t protesting. Click on that link to read what a Wellmark spokesman and the state insurance commissioner had to say.
Read the governor’s news release below.
Governor Culver Imposes Halt on Health Insurance Rate Hikes Pending Independent Review
Des Moines, IA – 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.
“The Culver-Judge Administration we have been concerned about the interests of Iowa’s consumers and vigilant in protecting them. As a result, Iowans in the past three years have enjoyed the lowest automobile rates in the nation, and competitive homeowner and medical malpractice rates,” said Governor Chet Culver. “We can, and we will ensure that any rate increases on 80,000 are fair and completely justified.”
Copy of the letter follows:
March 8, 2010Susan Voss
Commissioner
Iowa Insurance Division
330 Maple Street
Des Moines, IA 50319-0065Dear Commissioner Voss:
Given the recent issues about health insurance in Iowa and those reported across the country, it is critical that we increase our efforts to assist Iowans who are seeking access to affordable health insurance options.
You and I, and our respective staffs, have had the opportunity to communicate about these concerns and, consistent with those discussions, I am now directing you immediately to take several actions that are intended to provide additional protections for the interests of Iowa health insurance consumers.
First, I direct you to hire a third-party certified actuary, independent of any financial relationship with Wellmark Blue Cross-Blue Shield (“Wellmark”), 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 with respect to Wellmark. This review is to be taxed as an expense to Wellmark, and should not be borne by Iowa consumers. I further direct that you 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. I direct that the independent reviewing actuary be provided full access to all data submitted by Wellmark in support of its premium rate increase request. Finally, as a part of this review process, I direct you to instruct the independent third-party actuary to verify the processes followed by your staff actuary in the recent rate increase approval decision to assure that the Division is conforming to best practices in its health insurance premium rate increase review processes.
Second, I direct that, going forward, the process I have outlined, above,—one involving the retention of 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. Such independent reviews shall be charged as an expense to the insurer-applicants, and shall not be assessed to Iowa consumers. I direct that no such health insurance premium increase requests be approved that are not supported by the findings of these additional independent actuarial reviews.
Third, it is apparent that many Iowa citizens are not fully satisfied with what they now understand about the Division’s health insurance premium rate approval processes and any underlying reasons that may—or, may not—justify health insurance premium rate increases. Therefore, in addition to the steps I have outlined, I direct you to 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 and the insurance rates that Iowa’s consumers are required to pay. I should expect, at the very least, that existing practices with respect to the Division’s dissemination of information to the public be reviewed and that improvements be made with a goal of increasing public understanding of these health care cost and health insurance premium issues.
Fourth, I direct you to 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. The annual report should include information about current cost drivers of health care, such as chronic care costs and lifestyle-related costs and any other important elements. In order to provide a consumer awareness overview of costs that are related to health insurance premiums they are asked to pay, the report should include information from one or more medical cost inflation indices similar to the CPI. The document should also provide Iowans with easy access to a summary of financial information that is already submitted annually by health insurance companies to the Division by March 1 of each year—such as the overhead costs claimed by insurance companies and the compensation and bonuses paid to their executives.
Finding effective ways to assure that Iowans have access to quality, affordable health care remains one of our great challenges. I thank you in advance for your attention to these directives that are intended to assist Iowa’s consumers in meeting this challenge head-on.
Sincerely,
Chester J. Culver
Governor of Iowa
About O.Kay Henderson
Kay is a founding member of the Radio Iowa network newsroom. In 1994, she became the network’s news director. She’s a featured reporter and commentator on Iowa Public Television’s “Iowa Press,” and the 2002 recipient of the Shelley Award.
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