(Augusta)  Consumers for Affordable Health Care (CAHC), Maine's largest consumer health organization, which was a full party intervenor to the Anthem 2011 rate review proceeding, praised the Superintendent of Insurance and the Bureau of Insurance staff for the Decision and Order that reduced Anthem's request by almost $3 million. Anthem had requested an average rate increase of 9.7% in the individual market. The Superintendent approved 5.2% in a 44 page decision. The hearing was held on April 12 and 13 in Gardiner.

"This decision will save Anthem individual policyholders almost $3 million. That's money in the pocket. That's money that won't go to Wall Street." said Joe Ditré, the executive director of CAHC. Mr. Ditré and Andrea Irwin, Esq. provided legal representation to consumers and nurses in the proceeding. Consumers for Affordable Health Care represented the Maine People's Alliance and the Maine State Nurse's Association in the proceeding. "Much more needs to be done in Maine to reduce health care costs -- not just health insurance premiums. In the meantime, rate reviews are one way to spare policyholders from insurer's bureaucracy and waste," said Ditré.

"If policyholders are wondering why health insurance costs are high, they don't have to look very far. Anthem wanted almost $2 million (of its requested $6 million increase) for profits alone. The Superintendent's decision reduced that request by more than $1 million. At a time when policyholders cannot afford health care, Anthem's demand for 3% (about $2 million) was unconscionable," said Ditré. The Superintendent's decision granted an average rate increase of 5.2% of which one full percentage point (or about $600,000) was for profits.

 Source: Superintendent of Insurance Decision and Order, May 12, 2011 at pp. 37 - 38

"People don't understand that even when the Superintendent has denied or reduced Anthem's request for 3% in profits, like last year, when she reduced their request from 3% to 0.5%, Anthem still achieved 2.5% - over $1.5 million - in profits alone," said Ditré. "Since Anthem bought Maine's only nonprofit insurance company in 1999, Anthem has made over $15 million in profits from its individual line alone. [See the Table above] Almost every year for the last twelve years, with the exception of only 3 years, Anthem has made significant profits in the individual market -- and much more in the small group and large group markets," he said.

"Unfortunately, if LD 1333 as amended were the law it would have prevented this rate review from taking place and Anthem policyholders would have had to pay almost $3 million more in rates in 2011," said Ditré. "Once LD 1333 as amended is signed into law, we can expect individual insurance companies to begin to routinely ask for rate increases just below the threshold to avoid review," he said. While the Affordable Care Act requires reviews if greater than 10%, it does not prevent Maine or any state from reviewing requests that are less than 10% -- as the Superintendent did this year with Anthem's 9.7% request. What will happen is that Maine policyholders will lose the opportunity to save millions of dollars, as they did here, because this level of increase will evade review in the future under LD 1333 as amended.

Section D-2 at page 21 of Committee Amendment C "A" with a filing number H-186, which adds

24-A MRSA §2736-C, sub-§2-B, allows individual insurers to avoid rate reviews in the individual market unless a review is required by the federal Affordable Care Act. As stated above, the ACA requires rate reviews only when the request exceeds 10% - but does not preclude rate reviews below 10%.  LD 1333 as amended will preclude such rate reviews of requests less than 10%. In short, since Anthem's request average less than 10 percent, it would have avoided review.

A copy of the Superintendent's decision can be found here.

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