Anthem back before Maine supreme court to appeal latest rate decision

Posted Nov. 08, 2011, at 7:57 p.m.

BANGOR, Maine — Attorneys for Anthem Health Plans of Maine were back before the Maine Supreme Judicial Court on Tuesday disputing a rate hike decision affecting about 11,000 Mainers covered by individual, nonemployer health insurance policies.

The appeal was one of 13 justices were scheduled to consider Tuesday and Wednesday during the court’s annual fall session at the Penobscot Judicial Center.

The appeal concerns rates that went into effect July 1 and run through June 30, 2012. It was the third time in three years the firm, which is the only insurance company that offers individual policies in the state, has appealed a rate decision by former Maine Insurance Superintendent Mila Kofman. Justices twice have ruled in her and the state’s favor.

In May, Kofman rejected a requested 9.7 percent increase and set the average increase at 5.3 percent, according to a previously published report. She found that Anthem’s proposed increases were “excessive and unfairly discriminatory.” Kofman limited the firm to a 1 percent profit margin.

Anthem appealed the decision to the recently revived Consumer and Business Court. Superior Court Justice Thomas Humphrey upheld Kofman’s decision and Anthem appealed to the state’s high court.

Attorney Christopher Roach of Portland argued for Anthem that the superintendent’s decision denied it the right to earn an adequate or fair and reasonable rate of return on its individual insurance products, which traditionally had been between 3 percent and 5 percent.

“But in this economic climate,” Justice Warren Silver asked Roach, “wouldn’t that [1 percent profit] be a reasonable return?”

Roach countered that Kofman applied the wrong standards and her decision was not reasonable.

Assistant Attorney General Thomas Sturtevant Jr. argued for the state that Kofman had the authority to balance the cost of health care paid by consumers against Anthem’s right to make a profit.

In trying to define the criteria an insurance superintendent should use in making a decision, Justice Jon Levy asked Sturtevant, “Isn’t the best answer the criteria she used because, by nature, her role is discretionary? It’s her call and the court should defer to it.”

“That’s close,” the assistant attorney general replied.

Christopher Dugan, director of corporate communications for Anthem, said after oral arguments Tuesday that it was premature to comment on whether rates would be adjusted if the Supreme Court ruled in Anthem’s favor.

There is no timetable under which the court must make its decision.

This may be the last year Anthem is before justices arguing over rate hikes. The Legislature earlier this year passed a health care reform law put forward by Republicans. It includes a provision that calls for the superintendent’s review of proposed rate hikes only if they exceed 10 percent.

SEE COMMENTS →

ADVERTISEMENT | Grow your business
ADVERTISEMENT | Grow your business