Iowa | Fall | 2009 | Health Plan Analysis

Though Iowa has the second lowest health insurance premium rates nationwide, brokers and industry insiders warn that premiums, which went up 11 percent for many Iowa businesses over the last year, are likely to continue to rise. Nevertheless, Iowa employers are not ready to throw in the towel on employee health benefits. In the 2009 Iowa Employer Benefits Study, a survey of employers, only 1.1 percent said they would take the drastic step of dropping coverage if prices go up. They would first raise employee copays and deductibles and reduce benefits.

Employers also indicated greater interest in consumer driven health plans. Commenting on the data, brokers note that CDHP premiums have not so far been low enough to be the obvious choice for many Iowa businesses.

Like many other states, Iowa is looking at programs to develop health information exchanges and to establish medical homes among physician practices and hospitals. To date, the state has invested $150,000 to convene a study council on medical homes, but there have been no decisions on future financing or reimbursements.

Looking at HIEs, the Department of Public Health is leading an eHealth project through a four-step process of planning, devising infrastructure, testing and then implementing best practices for future HIE development. Though it’s early days for this project, the state has a foundation of smaller but similar projects already underway.

Insurers are bracing for higher medical costs due to the H1N1 virus this fall in addition to seasonal flu. In second quarter earnings reports, top national plans noted that medical costs were already rising. Most companies will pay for members’ vaccinations. Meanwhile, health experts are providing educated guesses on how long the flu season will last and how virulent it will be.