AUGUSTA – In a crowded hearing room at the State House on Tuesday, consumers expressed their frustration at the latest rate increase proposed by the state’s largest health insurance company.
Anthem Blue Cross and Blue Shield of Maine has requested increases between 3.3 percent and 56.8 percent, an average of 20.5 percent, for its HealthChoice line of insurance products for individuals who aren’t part of an employer or association group. The company, which holds a virtual monopoly of the state’s individual health insurance market, cites higher than expected claims costs and lower than anticipated enrollments. If approved, the rate increase affecting about 29,000 Mainers would take effect Jan. 1, 2007.
The advocacy group Consumers for Affordable Health Care took advantage of the event to voice its opposition to several rate increases requested by Anthem that have not yet been approved, including a 23 percent average increase in the state-sponsored DirigoChoice plan and a 6.3 percent average increase for Medicare supplemental plan.
Anthem reported overall net profits of almost $41 million in 2005, a record since it took control of Maine’s former nonprofit Blue Cross and Blue Shield programs in 2000. Its large-group and small-group policies made money in 2005, but the company, a subsidiary of Indiana-based Wellpoint, claimed losses of $5.7 million in its line of individual, nongroup insurance products.
Tuesday’s hearing, conducted by state Insurance Superintendent Al Iuppa, drew individual policyholders from across the state to protest the proposed increases to their already pricey policies. Elayne Richard, 52, of Fairfield, who works for a mental health agency and runs a small business with her husband, testified that the couple purchased a Blue Cross policy with a $250 deductible in 1980. It cost $180 every three months. Today, Richard said, she and her husband pay $1,876 a quarter for a plan with a $5,000 deductible, which doesn’t cover any of the preventive health care their doctors recommend.
“I find it unfair that we’re not given credit for making healthy choices; our premiums just continue to go up, and our coverage goes down,” Richard told the superintendent. In light of Anthem’s record profits, she said, the company’s request is “an insult to working middle-class people.”
Lorna Frost-Ryan testified that she, her husband and their 2-year-old daughter are covered by a $15,000 deductible plan which they have never had to use. The proposed rate increase, if approved, will drive her family into the ranks of the uninsured.
“We’re not going to pay the money. We’re done. We’re all tapped out,” she told Iuppa. She noted Anthem’s assertion that 1 percent of individual policyholders account for 40 percent of claims. “That must mean that 99 percent of us aren’t using the services,” she said. “I know we’re not … we’re young, we’re healthy, but all we ever got from Anthem was a gym bag or a free radio.”
Howard Crane of New Sharon called the health insurance industry “a goddamned racket” before being reprimanded by Iuppa. Crane said he needed knee surgery last year and was told he would have to pay $10,000 for the procedure here in Maine. His $15,000 deductible plan with Anthem wouldn’t be any help. Crane found a knee specialist at a state-of-the-art clinic in Canada that performed the operation for $2,150.
Crane told Iuppa he should “draw a line in the sand” against spiraling insurance costs. “Let the system break, come to a head and collapse, so we can do something different,” he said.
Valerie Knaut of Winslow questioned whether the rate increase would do any good, since it would clearly force people out of coverage when what’s needed is more enrollees. She questioned Anthem’s ability to continue offering individual policies. “Maybe that’s the [company’s] idea, to get rid of the whole program,” she said.
After the public testimony portion of the hearing, Anthem officials presented their detailed case for the rate increase, challenged by attorneys from Consumers for Affordable Health and from the Maine Office of the Attorney General. With participants going over provisions of the proposal with a fine-tooth comb, the hearing was expected to last into the evening and possibly extend to another day.
Iuppa is charged with determining whether the request is “excessive, inadequate or unfairly discriminatory.” Under normal circumstances, he must reach a decision within 30 days of the close of the hearing. He may either approve or disapprove the request, or he may make recommendations for refiling an amended request.
At a press conference hosted by Consumers for Affordable Health Care, spokesman Doug Clopp said state lawmakers should expect a busy winter session. Legislators will be called on to uphold insurance mandates, outlaw high-deductible insurance products that don’t increase policyholders’ access to health care, and approve the formation of a nonprofit state agency that competes with private, for-profit insurers.
Anthem spokesman Mark Ishkanian said after the press conference that Anthem is committed to providing individual coverage in Maine. The HealthChoice losses represent complex factors, he said, including state insurance mandates and out-of-control spending by providers. These elements must be fixed if a healthy, competitive insurance market is to take root here, he said.
Meanwhile, Ishkanian said, Anthem should not be expected to use profits from its more successful products to offset losses from the troubled HealthChoice line. “If the larger issues are not resolved,” he said, “we’re just transferring the problems from one group of customers to another.”
A public hearing on the proposed DirigoChoice rate increase is scheduled for 8 a.m. Nov. 28 in Room 127 at the State House; the Medicare supplemental plan rate hearing will begin 10 a.m. Nov. 20 in Room 126 of the State House.