Anthem individual insurance rates to rise 5.3 percent, reducing profits to $600K

Posted May 17, 2011, at 7:41 p.m.
Last modified May 18, 2011, at 10:55 a.m.

About 11,000 Mainers covered by individual, nonemployer health insurance policies sold by  Anthem Blue Cross and Blue Shield of Maine likely will see their monthly premiums go up by an average of 5.3 percent in the coming year — a significant reduction from the 9.7 percent increase requested by the company earlier this year.

Anthem could appeal the rate decision by Maine Insurance Superintendent Mila Kofman, issued late last week in a 44-page document available on the website of the Maine Bureau of Insurance. A spokesman said Tuesday that the company is reviewing the ruling.

Kofman’s report finds that Anthem’s proposed increases, filed in February, were “excessive and unfairly discriminatory” and would have resulted in built-in profits of close to $2 million in the individual market alone. Her ruling reduces the profit margin to about $600,000.

Affected policies include plans labeled HealthChoice, HMO Standard, HMO Basic and Lumenos. Increases in these lines may range from 3.1 to 13.2 percent. About 11,000 Mainers are covered by the affected plans.

Kofman, citing philosophical differences with the LePage administration, announced her resignation on Monday. She will leave her position June 1.

On Tuesday, Kofman’s ruling was praised by the advocacy group Consumers for Affordable Health Care.

“This decision will save Anthem policyholders almost $3 million. That’s money in the pocket. That’s money that won’t go to Wall Street,” said executive director Joe Ditre.

Kofman conducted public comment sessions in Orono, Portland and Gardiner before the April 12 formal presentation by Anthem and court-approved intervenors.

Since purchasing Maine’s nonprofit Blue Cross program in 1999, Anthem — a subsidiary of Indiana-based insurance giant Wellspring — has realized profits of more than $15 million from its individual coverage plans alone, according to Consumers for Affordable Health Care.

Ditre said that under the provisions of a new Maine law signed by Gov. Paul LePage on Tuesday, the Bureau of Insurance will lose its ability to review and adjust requested health insurance rate increases of less than 10 percent in the individual market.

“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 [the originally requested 9.7 percent average] will evade review in the future,” he said.

Similar articles:

ADVERTISEMENT | Grow your business
ADVERTISEMENT | Grow your business