Anthem's proposed increase protested

By JOSIE HUANG, Portland Press Herald Writer

Copyright © 2004 Blethen Maine Newspapers Inc.

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RATE HEARING HEARING ON proposed rate increases to Anthem's HealthChoice plans. WHEN: Nov. 12 at 9 a.m. WHERE: Room 209 (the Utilities Commission Hearing Room) of the Burton M. Cross Building, 111 Sewall St., Augusta. To top of story

Individual policyholders stung the most by skyrocketing health insurance costs are protesting a plan by Anthem Blue Cross Blue Shield of Maine to raise rates by an average of 14.7 percent, and as much as 158 percent in several cases.

Changes to Anthem's HealthChoice policies would affect more than 35,000 people insured through the individual market because the head of the household is self-employed, unemployed or does not have coverage through an employer.

About 93 percent of HealthChoice members have higher deductibles - from $2,250 to $10,000 - and "will be seeing (percentage) increases in the low teens," said Anthem spokesman Clark Dumont.

But bigger hikes could be on the way for the 7 percent of policyholders who have deductibles as low as $150 and more comprehensive coverage and, overall, use more health services, Dumont said.

Nine subscribers with a particularly high level of health care use will see increases ranging from 109 to 158 percent, Dumont said.

Dan Mercer, who has a $150 deductible plan, said his monthly premium would jump about 50 percent, from $480 to $732, under the proposal. At a Nov. 12 public hearing in Augusta, he plans to urge the state's insurance superintendent, Al Iuppa, to reject the proposal.

"As an individual it gives me several basic choices," said Mercer, who does not get benefits through his job as an associate chaplain at the Long Creek Youth Development Center in South Portland. "Go without insurance, get on state insurance - meaning I'd have to quit my job - or be stuck with a bill they know I have to pay."

If approved by Iuppa, changes would take effect Jan. 1.

Costs for individual policyholders are higher because they lack the benefits of group rates, or employer contributions. That forces many individuals into high-deductible plans that require thousands of dollars in out-of-pocket expenses before coverage begins.

Dumont said Anthem recognizes the difficulties for policyholders and has refrained from raising HealthChoice premiums for the last two years. The last rate increase took effect in January 2003 and averaged 3.4 percent. But there are now more health care services, he said, and existing services are going up in price.

Also, the individual group market tends to draw sicker people than the large group market, in a scenario called "adverse selection." The healthier segment of the uninsured may try to skimp on insurance, but those with chronic conditions, for example, cannot go without.

"Generally speaking, the experience is that people covered by individual plans tend to observe higher use of services," Dumont said.

The proposed hike is big enough to move the Attorney General's Office to action. The agency opted not to fight proposed rate increases by Anthem two years ago, stating that proposals were largely in line with inflation.

This time, however, the agency is an official intervenor for Maine consumers, said Assistant Attorney General Christina Moylan.

"We want to make sure that there is a need for this and we're likely going to be advocating that (the increases) be lower," Moylan said.

The proposed rate hike is likely to push more individuals toward DirigoChoice, the health insurance program offered by the state and administered by Anthem.

Subsidies for low- to mo- derate-income enrollees in DirigoChoice may make insurance more affordable for some individuals, but there are limited spots for them. The state has capped the number of individual policies at 4,500, to avoid the high cost of adverse selection, compared with 26,500 for small businesses.

Since enrollment began Oct. 4, more than 200 applications have been returned to the state, and Anthem has issued more than 2,000 quotes, said Adam Thompson of the Governor's Office of Health Policy and Finance.

Individual applicants have been outnumbering small businesses, "but that's to be expected because of the limit," Thompson said.

Staff Writer Josie Huang can be contacted at 791-6364 or at: