Increased Rates Coming to Affordable Care Act Members

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DES MOINES, Iowa - Affordable Care Act members across the state will see an increase in their insurance rates.

In January of 2015, Wellmark ACA members’ rates will increase 11.5 – 14.5%, CoOportunity will increase their rates 19% and Coventry Health Care will boost their rates by nearly 9%.

Wellmark’s executive vice president say the increase is based on the amount of services and prescriptions ACA members use and due to the number of people who do not pay their premiums.

“We had about 50 plus individuals actually purchase our policy, pay one month of our premium, seek services and then cancel their coverage,” says Laura Jackson.

Jackson says members chose to use their coverage on elective surgeries like gallbladder removals and nose jobs before canceling their coverage. Companies like Wellmark say as a result, they were forced to increase insurance rates to cover the cost of individuals who did not pay their premium.

The Iowa Insurance Division calls the tactic, “adverse selection.”

“It’s when people choose to receive benefits at their convenience,” says Tom Alger. “It’s a reality of the business of insurance and sometimes that does come into play and sometimes that affects future rates.”

Alger affirms “adverse selection” is within the rules but there is nothing insurance companies can do to prohibit members from taking advantage of the system. By law, companies have to re-issue Affordable Care Act polices when requested and are not allowed to ask how the members policy was used before they canceled their coverage.

“The hard part of this is, is that when you put a lot of people into the system you do have pent up demand and we all have to pay for it,” says Jackson.

Wellmark indiviual member rates will also increase by nearly 6 %. No other members of Wellmark will be affected.

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