Feds to review Iowa health insurance rates 

The federal government intends to conduct its own review of Iowa?s health insurance rates after determining that the state?s rate review process is insufficient.

The Des Moines Register reported Wednesday that Iowa is one of 10 states where review procedures were deemed too weak, a claim the state insurance commissioner is vehemently disputing.

?This is craziness,? Susan Voss said. ?The thing that really ticks me off is we have the exact same review procedures as most of those states that got approved.?

The dispute comes as health insurance rates continue to increase, according to David P. Lind and Associates, a Clive insurance broker that studies the issue.

Iowa employers faced an average cost increase of 13 percent in 2010 and 11 percent in 2009. The biggest increases were seen by smaller companies with 10 to 19 employees, which saw increases of 17 percent last year and 16 percent in 2009.

The state insurance division sees no need for the federal government to duplicate the state?s review of insurance rates, said Tom Alger, an agency spokesman.

?We believe we know the market better,? he said.

Alger also said the federal government, unlike the state, has no authority to order reductions in rates.

Federal officials sent a letter to Voss on July 1 that said last year?s federal health-reform law requires a review of ?unreasonable increases in premiums for health insurance coverage.?

While they praised Iowa?s review of rate increase for individual policies, federal officials said the reviews of small-group policies were flawed. They gave little information about the differences.

Steven Larsen, a federal administrator who helps oversee such issues, said the matter involves a question over whether Iowa regulators have the authority to demand information from insurers offering small-group policies.

His staff was under the impression their Iowa counterparts lack such authority, but Larsen said if it turns out they do he would reverse the finding that Iowa lacks effective oversight.

State Rep. Janet Petersen, D- Des Moines, who successfully pushed for public hearings when health insurers seek large rate increases, said she doesn?t understand why Voss would oppose the federal review.

?I think the more review the better. I can?t see any harm in it,? Petersen said.

Petersen also said she?s puzzled by the state insurance division?s decision not to apply for $1 million in federal grants to improve the review process. Voss said the state has an effective program that is financed by fees paid by insurers and the money wasn?t needed.

A teleconference with state and federal officials was scheduled for Friday, which Voss said should clear the air.

Wellmark Blue Cross/Blue Shield, which provides 63 percent of small-group policies in Iowa, released a statement supporting minor changes to Iowa?s review process.