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DES MOINES, Iowa (AP) — Iowa's largest private health insurer is proposing double-digit increases in premium rates for some of its individual plans next year, citing higher medical and prescription drug costs and greater use of services.
Wellmark Health proposed the increases for 16 of its plans, including one increase of nearly 35 percent, in filings with state regulators and the U.S. Department of Health and Human Services. Iowa-based insurers proposed rate increases of at least 10 percent for 30 separate plans, according to the federal HHS. The company serves 1.7 million Iowa residents.
The proposed increases would apply to plans sold on the health insurance exchanges created under the federal health care law, as well as individual coverage sold through brokers and agents. Rate increases were only disclosed on the website if they were proposed to grow by 10 percent or more.
Insurers say the rates reflect averages and do not necessarily mean that a customer's premiums will increase. Those that do could grow by more or less than what was shown online.
Coventry Health Care of Iowa proposed rate increases for 12 of its plans, ranging from nearly 11 percent to 20 percent. Time Insurance submitted two plans, proposing increases of 22 percent and 66 percent.
Specific coverage levels weren't specified in the filings. The increases don't apply to employer-based or Medicare Supplement plans.
Wellmark said in a statement that it assumed a 30 percent increase in services being used as the federal health care law went into effect, due largely to pent-up demand as more people signed up for insurance. But the actual cost increase in medical services consumed was almost double what it had predicted, the company said.
Wellmark said that, for every $1 in premiums paid by members in 2014, the company was spending $1.28 on health care claims, government fees and administration.
"Thus current premium levels are too low to support the business, and will need to be increased substantially" the company said.
Other factors behind the increases include reduced payments from the Federal Reinsurance Program, a temporary program to help stabilize the market as the Affordable Care Act went into effect. The program is scheduled to reduce its payments to insurers in 2016 and will be phased out in 2017.
Individual health insurance policies are a relatively small slice of the overall market. Many more people are insured through an employer.
Open enrollment begins later this year.
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Online:
Proposed rate increases: http://ratereview.healthcare.gov
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