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Anthem Sues State of Maine over Rate Hike Request Denial
October 5, 2009   Reported By: Josie Huang

The state and Maine's largest private insurer Anthem Blue Cross Blue Shield are locked in a legal battle over how much profit Anthem should be able to make. Earlier this year, Maine's insurance superintendent Mila Kofman denied Anthem's request to raise rates for its individual insurance products, calling it "excessive," and instead approved an increase that leaves Anthem without a profit margin for providing those 12,000 policies. Now Anthem has filed suit to get the decision overturned. 

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Anthem Sues State of Maine
Originally Aired: 10/5/2009 5:30 PM

"Superintendent has noted that Anthem's done pretty well." Janet Mills is the Maine Attorney General who is representing the superintendent of insurance. Mills' office counters that Anthem averaged a 3.2 percent profit margin in its individual line of products for the nine years that the company has been in Maine. And that going a year without a profit from those products will not drain the company.

"She found that in fact that had contributed to $17.5 and that its executives were pocketing rather large salaries and bonuses." Anthem spokesman Chris Dugan did not comment on the lawsuit beyond acknowledging that it had been filed.  In a brief filed with the Maine Superior Court, however, Anthem calls a 0 percent profit margin unfair and unprecedented; it says it wants to have a profit margin of at least 3 percent.

Hearing that angers some consumer groups.

"Average Mainers don't get an assurance that they're going to get a profit margin. They don't get that type of luxury in a tough time." Greg Howard is a health care activist with the Change that Works campaign. The group has planned a Wednesday rally outside Maine Superior Court in Augusta.

The activists favor of a government-sponsored insurance option being debated in Congress and they say Anthem's lawsuit underscores the need for a public option.

"It's a shameful act on their part at a time when people are bankrupt because of medical costs." Oral arguments are expected to be heard next month. As for the rate increase approved by the insurance superintendent - 10.9 percent instead of the 18.5 percent Anthem wanted - that's been in effect since July.


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