March 7, 2010

Anthem defended for rate hike proposal

By John Richardson jrichardson@pressherald.com
Staff Writer

BY JOHN RICHARDSON

Sunday Maine Telegram

Thousands of Mainers who buy their own health insurance are facing a nearly 23 percent average increase in premiums, the sixth double-digit rate hike in the past six years.

For many, it's the latest example of corporate greed bankrupting policy holders or forcing them to drop coverage and hope they can avoid getting sick, or at least avoid seeing a doctor.

Even the Obama Administration has taken notice, pointing to rapidly rising premiums in Maine and other states as proof of the urgent need for comprehensive national health insurance reforms.

But, as usual in the complex realm of health insurance, there is a lot of disagreement about what is driving Maine's runaway insurance rates.

Rising health care costs and expensive new treatments and drugs are clearly a big, if not the biggest, piece of the puzzle. And some of the rising price of insurance is the unintended consequence of Maine rules that were meant to guarantee everyone access to affordable health insurance, according to Anthem officials and others in the industry.

Rising health care costs and expensive new treatments and drugs are clearly a big, if not the biggest, piece of the puzzle. And some of the rising price of insurance is the unintended consequence of Maine rules that were meant to guarantee everyone access to affordable health insurance, according to Anthem officials and others in the industry.

"A lot of times we're missing the mark and we're not paying attention to what the underlying cost drivers are," said Joel Allumbaugh, president of the Maine Association of Health Underwriters.

Anthem Blue Cross and Blue Shield has proposed a 22.9 percent average rate increase for its 11,000 individual policies, which cover about 20,000 people. Anthem provides health insurance to roughly half of the 40,000 Mainers who buy their own plans because they don't have coverage through their jobs or are not old enough or poor enough to qualify for government insurance.

For Fred Conti, a self-employed real estate appraiser from Freeport, Anthem's proposal means his monthly premium would jump from $284 to $347.

Such pricey premiums do not mean Conti has anything close to Cadillac coverage. In fact, the 60-year-old carries a $10,000 deductible, which means he pays for every doctor visit, drug prescription and medical test until his costs exceed $10,000, when Anthem would pay the bills. In about 20 years as an Anthem subscriber, Conti can't remember ever reaching his deductible and actually filing a claim.

"A lot of people are just throwing their hands up and saying I can't afford it," Conti said. "The only reason I have it is I have to protect my assets" in case of a severe illness or accident.

Instead of joining the 11 percent of Mainers without health insurance, Conti plans to keep his premium closer to where it is now by increasing his deductible to $15,000, the highest amount offered.

Morris Kreitz, a retired architect in Cape Elizabeth, already has a $15,000 deductible and pays for all his doctor visits without help from Anthem. Kreitz and his wife, both 62, still expect to pay a combined $480 a month after the rate hike goes through.

"I think, realistically, we're not going to drop it," he said. "We don't want to end up destitute because one of us got ill or injured."

Both Conti and Kreitz have had Anthem's health insurance long enough to remember when the company had plenty of competition and charged much lower premiums. That changed in the 1990s, as health care costs climbed and Maine imposed rules to protect access to affordable insurance.

(Continued on page 2)

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