PORTLAND, Maine — State regulators were justified last May in denying a planned rate hike by Anthem Health Plans of Maine, the state’s highest court ruled Tuesday.
The Maine Supreme Judicial Court sided unanimously with former Bureau of Insurance Superintendent Mila Kofman’s decision to slash by nearly half a rate increase affecting about 11,000 Mainers covered by Anthem’s individual health insurance policies. The rates took effect July 1, 2011, and run through June 30.
Anthem’s appeal marked the third time in three years that the firm, which provides the largest number of individual policies in the state, has appealed Kofman’s rate decisions. Justices have ruled in her and the state’s favor each time.
On Tuesday, the court ruled Kofman reasonably determined that Anthem’s proposed rate increase of 9.2 percent was “excessive.” Kofman set the average increase at 5.2 percent and limited the firm to a 1 percent profit margin.
Anthem originally sought a 9.7 percent increase before amending its request down.
“We are in the process of reviewing the court’s decision and have not yet determined our next steps,” Scott Larrivee, a spokesman for Anthem Blue Cross and Blue Shield, said in a statement. “That said, we stand by our position that filed rates need to both cover the medical costs for our members and allow for an adequate risk margin to cover unanticipated costs.”
Kofman resigned as superintendent at the end of last May, shortly after issuing the Anthem ruling.
In her decision, Kofman found that Anthem’s proposed increase would have resulted in built-in profits of close to $2 million in the individual market alone. Her decision cut the profit margin to about $600,000.
Anthem has argued that the lower rate increase prevented the company from earning a reasonable profit on its line of individual health plans in Maine. It sought a 3 percent profit margin, consistent with the industry average, said the insurer, which saw its margin chopped to zero in 2009 and to half a percent in 2010.
The justices disagreed. Maine law doesn’t require the superintendent to consider how rate changes affect health insurers’ profit margins, let alone account for a “reasonable” margin, their opinion states.
Anthem appealed to the state supreme court after Superior Court Justice Thomas Humphrey upheld Kofman’s decision.
“It’s a tremendous victory for consumers and for the regulators, whose decisions saved Maine consumers, at least Anthem consumers, $3 million,” said Joe Ditre, director of the advocacy group Consumers for Affordable Health Care, which has opposed Anthem’s appeal in court.
Anthem couldn’t support its claim that the lower rate increase would force it to charge its business customers more to make up for losses from its individual plans, he said, citing the justices’ opinion.
“What Anthem was trying to do was scare its other customers,” he said.
Anthem’s latest appeal could mark the last time it heads to court over its rate increases in Maine. Last year, the Legislature passed a health care reform law that calls for the superintendent’s approval of proposed rate hikes only if they top 10 percent.
The only thing Anthem wants is GREEN MONEY! They need to be run out of state… If there is any company sucking money, other than casinos, its HEALTH INSURANCE!
Indeed. Note that there is only ONE insurance company in the State that is offering individual policies. Did you ever stop and wonder why that might be the case? If the Maine market was so profitable and attractive don’t you think there might be some other health insurance companies competing for this business? I would suggest to you that the Maine legislature over the years has already succeeded in driving most health insurers out of the state so lets just finish the job and drive Anthem out too. What Anthem wants is what every company wants: to earn a reasonable return on their book of business. What Maine wants is for Anthem to underwrite its business in Maine with revenue it generates in other states. In my humble opinion that is an unreasonable expectation on Maine’s part.
So the rates can go 9.9% every year and the public has no one in the state representing them on their behalf. State government no better than the federal.
Keep voting Republican!
“the firm, the only insurance company offering individual policies in the state”.
Pretty much sums up 40 years of Liberal and Democratic control.
Most loony Leftists would have us push out Anthem as well. I can’t wait for the day.
Ummm – do the names Longley, McKernan and King mean anything to you?
More GOP Fairy Tales.
yessah
Last time I checked Governors don’t write and pass laws.
but theu do have the power of a veto…
Longley and King both liberals.
Doesn’t matter the party. It doesn’t change the power they have.
Do you every check facts before you comment?
They are trying to push Anthem out, that’s what this is all about. Then we can get democrats to run a public system of health care which is what really makes them salivate. All of that money at their disposal and they didn’t have to lift a finger to get it.
I’m not sticking up for Anthem ( I think they’re a money greedy company), but
if we had a President or a Congress that had the kahunas to do something to reign in the outrageous cost of health care and the money hog Pharmaceutical companies, maybe then we could have competition from other insurance carriers. Too bad it’s just a fantasy.
Where’s all of the “less government” crowd on this issue?
They went away!
Anthem is not the only insurance company in Maine that sells individual plans. Go to Aetna.com (I’m not trying to give them business btw). You can purchase an individual plan. A friend of mine has one of their plans. I’m tired of all the misinformation out there. Reporters should do a little more work.
And thanks to the ROBthePUBLICans passing an insurance lobbyist authored bill, you can bet your bottom dollar that those slimebags at Anthem will enact a pile of 9.99999999999% rate hikes in the coming months.
And again the case for the Public Option is made. Maine’s Court’s were completely correct when they ruled that the law specifically prohibited the profit margin factor from being used or considered in their rate increase’s. That’s what the free market is for. That the Legislature now has unleashed this rate monster on the public, with the – 10% unsupervised giveaway is, tells me at least that the Legislature is now frimly in Anthem’s pocket. When Anthem goes and grabs everyone’s wallet, is going to be seen as a huge reason why those Rep’s and State Senator’s who voted for the giveaway need are probably going to be voted out.
And if LePage even tries to go near and giveaway any more to Anthem, well, given the recent mess he made ouuta the DHHS budget and his fanatical drive to give up the State’s responsibilities to protect the public, Paulie can be all but asssured that anyone who’s attached to him politically is going to be DOA to the voter’s as soon as they file their candidacy paper’s. And the really interesting part of this is that Anthem is going to be the cause of it all every month when their customer’s see that 10% increase EVERY TIME THEY SEE THERE PAYCHECK STUB. A monthly reminder as to just how well LePage is serving them. November is a lot closer than anyone realizes. And that rate increase is going to be a monthly reminder.
Gotta tell you that state employees , retirees and yes our political electees in Augusta are all insured by Anthem as far as I know. You can’t tell me that a lobbiest from Anthem dosen’t have some of them in their pocket ! I think it reasonable to assume that members of ” the insurance regulation board “are insured by Anthem as well ! Anyone see a conflict of interest here ?
And again the case for the Public Option is made. Only by forcing the insurance companies, thru competition, are they going to bring down rate’s. And for those who cry about the “Public” part of this, think for small minute. Who else is going to be able to bring these rate’s down?
Yes, I see a conflict of interest here. Why not make Maine a State where other health insurers want to be?
Hey, I am all for responsible and AFFORDABLE health care insurance. But when these same health care insurance company’s go and collude to keep rates artificially high and create numerous ‘qualifying’ criteria to keep otherwise normal and healthy customer’s from purchasing said insurance is one of the main reasons that the Public Option is so badly needed.
As far as Anthem is concerned, well, if they are so concerned about competition that they need to try to intimidate the State Insurance Comissioner, that alone should give us all a serious reason to question as to just who is being served best, Anthem or the public. A more open, responsible, and affordable, insurance product is needed in Maine. That has been established beyond doubt. That the insurance market is trying to intimidate Maine by not competing unless they get ‘there way’ with unregulated sales and no oversight is, again, one of the reason’s as to why the Public Option, like it or not, is going to be here. And it’s an interesting side note that no where in all of this has the Governor said anything about this. Like him or not, even he see’s this issue as a DOA issue. What he needs to do is ‘step up to the plate’ as Governor and throttle Anthem about there constant whining and crying on this rate issue and tell’em they are not going to get anywhere but in front of a Legislative Committee if they keep this crap up. That type Committee is very likely to start examining Anthem’s business practice’s IN DEPTH. Such in depth examination’s have a frequently seen outcome of ‘dirty laundry’ turning up out on the wash line for all to see. Like I said, even LePage knows a ‘dog’ when he see’s one.
I thought Gov. Lepage had done that or did the Libby’s , excuse my spelling error , liberals stand in his way ?
Who do you see responsbile for the situation that there is only Anthem left in the state?
“Anthem’s latest appeal could mark the last time it heads to court over its rate increases in Maine. Last year, the Legislature passed a health care reform law that calls for the superintendent’s approval of proposed rate hikes only if they top 10 percent.”
That legislature, really looking out for the people of Maine! How does a 9.9% yearly hike sound to ya?
Yes, let’s push anthem out of the state. That’ll leave practically nobody else.
Then do the right thing: institute universal health care. It’ll be a lot cheaper than what were paying now. The state could anchor the program with teachers, state and University employees and retirees. I’m sure the other large employers would rush to participate.
Just think, a system devoted to health care instead of one that spends over 50% of its premium dollars on pushing paper and executive salaries.
Considering so many lives are dependent on insurance and they affect emergency rooms visits and overall medical expenses in a community, I think they should be non profit.
That would go for pharmaceuticals and other medical expenses people are expected to get. I heard the state hospitals are already non profit?