Battling back against rate hikes

Carrie Fitzgerald, an advocate for children and families in Iowa, was frustrated by health insurance premiums continually increasing for Iowans in the individual market.

Wellmark Blue Cross and Blue Shield dominates 80 percent of the market in Iowa. Just a year after they raised premiums by an average of 18 percent, they announced last fall that premiums would again be increasing: this time by an average of 11 percent.

According to Fitzgerald, for years there was little recourse in Iowa for consumers facing unreasonable rate hikes. They could complain about their premium increases, but complaints would usually go unheard. For many, their only option when faced with unaffordable premium increases was to go without coverage.

And while Wellmark Blue Cross Blue Shield continued to raise rates for consumers—saying they needed the extra money to stay in business—they were erecting a brand new, state-of-the-art building in downtown Des Moines that set them back $250 million. To Fitzgerald and other health care advocates, something simply didn’t add up.

As an advocate, the insurer’s lack of transparency also appalled Fitzgerald. Year after year, families and individuals were asked to pay more and more of their hard-earned money without a fair say in the process or any opportunity to question whether the premium increases were justified.

State Rep. Jan Petersen didn’t like the way that insurance companies were raising rates without being held accountable either. So she introduced an amendment to an insurance bill that would require public hearings to assess whether proposed health insurance rate increases were reasonable and how they would affect consumers. This amendment passed, becoming law in the spring of 2010.

As a result of the law, Iowa Insurance Commissioner Susan Voss scheduled public hearings in December 2010 and January 2011 regarding Wellmark’s proposed rate increase and encouraged consumers to come and share their stories. In December, 12 people from all parts of Iowa came to speak before Insurance Commissioner Voss about what they believed to be an unfair increase.

One speaker was receiving cancer treatment and was struggling to both afford his increasing premiums and the cost-sharing for the MRIs and chemotherapy he needed. Year after year, the insurer raised his premiums, while simultaneously reducing how much it would pay for necessary cancer services like MRIs. The increases in premiums and cost-sharing that never seemed to cease led him to fear that he would soon be unable to get his care at all. His message was simple: If something wasn’t done, he and many others would be forced to go without coverage and critical medical treatment.

Additionally, 420 people sent comments to the Iowa Insurance Division leading up to the hearing in January. Most pleaded with the Insurance Commissioner to deny the Wellmark rate hike, as it would put the cost of premiums out of their reach. According to the Consumer Advocate of the division, Angel Robinson,

A number of comments elaborated on pre-existing conditions that have or would prevent that policyholder from obtaining coverage with a different company. These members of the public expressed frustration over feeling trapped into paying whatever price increase affected their deductible [plan]. Some felt they were being priced out of the market.

After two separate actuarial analyses came back, Insurance Commissioner Voss decided that the rate hike proposed by Wellmark was excessive. Instead of allowing the nearly 11 percent increase, Commissioner Voss reduced the allowable increase to 8.5 percent.

While that may not seem like a big difference, it still represents a victory for consumers. For the first time in Iowa, consumers were able to voice their concerns with health insurance rate hikes and know that their stories were heard. In a statement about her decision, Commissioner Voss applauded consumers for coming forward and telling their stories, stating that their participation in the public hearings played a big role in her decision.

In a world where insurers seem to hold all of the cards, everyday Iowans were able to band together to push back against what they saw as an unjust premium hike. Other states can use the money that the Affordable Care Act provides them to review rates to set up their own processes, and we encourage them to do so.