Large insurance carrier for educators sues to halt new law

Posted Oct. 14, 2011, at 5:13 p.m.

AUGUSTA, Maine — One of the state’s largest insurance carriers for educators and their families is challenging two new state laws that it says weaken health care coverage.

This week, the Maine Education Association’s Benefits Trust filed a lawsuit in federal court that seeks to block implementation of LD 1326, a law that requires Anthem Blue Cross and Blue Shield, the trust’s insurer, to release claims history upon request.

The lawsuit also addresses LD 404, which requires the Benefits Trust to use a comprehensive bid process to create a lower-cost insurance option by July 2012.

MEA President Chris Galgay opposed both laws during the recent legislative session because he said they threatened to drive up insurance costs while lowering the quality of benefits.

The rationale behind the bills was that if schools have access to Anthem’s claim data, they can use that to find cheaper plans elsewhere.

“Our health insurance plans are a fundamental part of the economic security for thousands of educators and their families and we need to defend them against this improper exercise of government authority,” Galgay said in a statement this week. “No other insurance provider is being hit with these mandates and it is clear that LD 1326 and LD 404 were enacted to undermine our employee-run insurance plan and replace it with management plans — even if they provide less coverage at higher costs to participants and taxpayers.”

LD 1326’s sponsor, Rep. Ralph Sarty, R-Denmark, said this spring that the bill simply was designed to give school districts flexibility to self-insure or find more affordable plans during a time of financial pressure.

Sarty’s bill contains no mandates. School districts can stay with the coverage they have or look around for a better deal. It was supported by the Maine School Management Association.

Last year, Bangor Superintendent Betsy Webb expressed dismay about her inability to get information about claims from MEA Benefits Trust.

Like other school administrators, Webb was looking for ways to trim her annual budget. Without the data, Webb said, other carriers were not interested in negotiating with Bangor.

“When we went out to other companies to get quotes, two companies said they couldn’t quote without claim data. Another company used general trend data, and their quote came in much higher,” she said at the time.

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