WellPoint Subsidiary Fights Maine Over Big Rate Hike

Anthem Blue Cross and Blue Shield in Maine, a subsidiary of WellPoint, the nation's largest insurer, wanted the state to approve an average rate hike of 18.5 percent on its policyholders. Maine rejected the increase and now the insurer is fighting for the hike in court. Robert Greenwald's Brave New Films is taking aim at Anthem's rate reach in the latest installment of his "Sick for Profit" series. The video, posted below, is a slick pitch for pitchfork-style outrage. It notes how much WellPoint pays its CEO ($9.8 million) and how much of its policyholders' premiums it spends on lobbying ($9.5 million). WellPoint's subsidiary in Maine says it needs the rate increase to guarantee a 3 percent profit margin. "The only justification for this lawsuit is just pure greed," says Ali Vander-Zanden of the Maine People's Alliance in the video. The Maine attorney general's office seems to agree -- in a Sept. 23 filing, in response to the insurer's claim that raising premiums is necessary for the financial health of the company, the AG says Anthem is perfectly profitable. In its filing, Anthem said it had lost $3.7 million on its individual insurance products over the past five years. The AG says Anthem has made $5.4 million from individual consumers over the past two years, and points out that Anthem paid $75.7 million in dividends to WellPoint in 2008, $40.4 million in 2007, and $35.6 million in 2006. And its executives paid themselves pretty well, too. "In 2006, Anthem executive compensation in Maine for its nine highest-paid employees totaled over $4.3 million, averaging almost $500 thousand per executive," the AG's filing says. "This included total base salaries of nearly $1.6 million, bonuses in excess of $835 thousand, and all other compensation of over $1.9 million (which may include payouts under multi-year long term incentive plans, sales incentives, severance, and the exercises of stock options granted in prior years.) ... During 2006-2008, the three-year average executive compensation for Anthem's top nine employees remained at nearly $500,000." The attorney general points out how much Mainers already pay: "In addition to the average annual premium of approximately $6,000 paid by Maine consumers to Anthem in 2008, these same individuals paid their own health care costs below the deductible. The average deductible as $7,250 in that year, and is projected to grow to an average of $7,570 in 2009... That means the average policyholder would have to incure a total cost of more than $13,000 in premium and deductibles, prior to becoming eligible to receive any health benefits under the policy." The filing states that with the rate increase, Anthem's 12,000 policyholders in Maine "would have paid an additional $12 million in annual premium for the same level of benefits." Oral arguments are expected in November. An Anthem spokesman has not yet responded to a request for comment from the Huffington Post. Watch the video from the Huffington Post

Follow Up on Anthem's Rate Increase Request

There are two more public hearings on Anthem's rate increase request. The first one is on March 3rd at 5:30 pm at the Wells Conference Center, Room 3, at the University of Maine in Orono. The second one is on March 10th at 5:00 pm at the Talbot Lecture Hall, Luther Bonney Hall at the University of Southern Maine in Portland. The third one, the hearing I mentioned previously, is on March 12th at 9:00 am at the Central Conference Room of the Department of Professional and Financial Regulation, Gardiner Annex, 122 Northern Avenue in Gardiner. Staff members from the Bureau of Insurance will be on hand at the March 3rd and March 10th hearings to assist consumers with other insurance matters. General insurance materials will be available and staff will answer questions. Comments can also be submitted for consideration by the Superintendent of Insurance, Mila Kofman, through US Postal mail or email: Email: Pat.Galouch@maine.gov Mail: Superintendent of Insurance Attn: Pat Galouch 34 State House Station Augusta, Maine 04333 This additional information came to me in an email from Representative David Cotta.

Anthem Requesting Another Rate Hike - Do they really need it?

Anthem Blue Cross and Blue Shield (“Anthem”) has filed for approval of proposed revised rates for certain of its individual health insurance products, specifically its HealthChoice, HealthChoice Standard and Basic, and Lumenos Consumer Directed Health Plan products. Anthem proposes revised rates for these products that it asserts will produce an average increase of 14.5%. As identified in its filing, the largest premium increase depending on deductible level and type of contract for HealthChoice is 17.2%, for HealthChoice Standard and Basic is 7.7%, and for Lumenos is 34.1%. As of November 2008 there are 12,049 policyholders who will be affected by the proposed rate revisions. Anthem requests that these rate revisions become effective on May 1, 2009. Does Anthem really need the rate increases? Consider this, they already make a great profit on the policies they sell. Between 2004 and 2007, in Maine, Anthem's profits increased by 89.2%, increasing from $40 million to $75.7 million, while its membership increased over that same period of time at just 2.4%. Anthem's annual profits in 2007 were $75.7 million. Anthem's surplus grew from $177.2 million to $252.1 million over the same time period, 2004 to 2007. What are they doing with all this money? Paying it out to their share holders in the form of dividends, paying it out in the form of bonuses to their CEOs, but certainly not making health care coverage more accessible and more affordable. Just think, with half of those profits, they could have given Dirigo its much needed boost. What an idea! But no, they and the Maine State Chamber of Commerce, every year, take Dirigo's savings offset payment to court, challenging the way it is calculated. More corporate greed at the labor and expense of Maine's hard working people. While all this is happening, people are losing their health care coverage because they can no longer afford it. HEALTH CARE SHOULD NOT BE A PROFIT MAKING BUSINESS. NO PROFIT SHOULD BE MADE OFF SICKNESS OR PREVENTIVE MEDICINE. Maine's Bureau of Insurance is holding a public hearing on this proposed rate increase by Anthem. If you're one of these policy holders, or an interested individual as myself, I urge you to attend the public hearing. It will be beginning at 9:00 a.m. on March 12, 2009, in the Central Conference Room at the Department of Professional and Financial Regulation, Gardiner Annex, 122 Northern Avenue, Gardiner, Maine. Members of the public are invited to attend the hearing. For all the legalese of this hearing, check out the Bureau of Insurance's web page. Anthem's profit figures comes from Insuring Health or Ensuring Profit? A Snapshot of the Health Insurance Industry in the United States, page 21, published by Northwest Federation of Community Organizations in the Summer of 2008. Be patient as the report loads, it takes a second or two.