Want to save some money on health insurance? Move to New Hampshire.

A health insurance policy for a family of four would cost $770 per month more in Maine than in New Hampshire, according to figures provided by Anthem Blue Cross.

For policies that include maternity benefits, and have a $1,000 deductible and a 20 percent co-pay, the Maine family would pay $1,927 per month; the New Hampshire family would pay $1,157.

This example was sent to me by Chris Dugan, director of corporate communications as Anthem Blue Cross and Blue Shield in Maine and New Hampshire.

Insurance regulators and legislators should address that $770 difference.

I don’t envy Dugan’s job. He deals with questions from people — including columnists like me — about health insurance issues. I doubt that he gets many calls from people who want to tell him how happy they are about rates or coverage.

I think Anthem’s request for a 10 percent rate increase for individual policies is part of a continuing assault on people who already pay too much for health insurance.

Dugan disagreed, citing statistics that show Blue Cross barely broke even on the individual policies it wrote in Maine last year. After expenses — mostly payments to doctors and hospitals and for drugs — the profit for Maine Blue Cross on individual policies was only 1.6 percent in 2010. In 2009, the company lost 3.7 percent.

Dugan made an important point. Blue Cross is a private company, owned by shareholders, and it has a right to make a reasonable profit.

But I think another statistic deserves consideration. It is the $13.4 million in salary, bonuses and stock options paid last year to Angela Braly, the chief executive officer of Wellpoint, the corporation that owns Anthem.

Dugan noted that Braly’s salary is a tiny percentage of Wellpoint’s finances and has no direct impact on premiums in Maine. He’s right, but knowing that she is paid more than $1 million per month does not make me happy as my insurance premiums increase.

My bank records show that since January 2007, the monthly cost for the $5,000-deductible policy I buy for my wife has jumped from $380 to $507. If Anthem’s requested 10 percent increase is approved, our monthly cost will jump to $557. That’s $6,684 per year for a policy that doesn’t pay for anything until my wife has spent $5,000 on health care.

While I find the increase of $2,124 in four years astounding, people who are less fortunate than I find it impossible. Many just can’t afford it and drop their insurance.

What makes it more costly for Anthem here than in New Hampshire, Dugan said, are Maine’s laws and regulations.

Dugan offered a few examples of the differences in insurance regulations between the two states.

In Maine, insurance companies cannot consider the health of a person in setting rates, Dugan said. That means that “healthy and not-so-healthy individuals pay about the same rate.”

“New Hampshire, on the other hand, has the ability to medically underwrite risk,” Dugan said. “This allows N.H. rates to reflect the risk in their rates, making it easier for younger and healthier subscribers to purchase insurance.” That helps keep rates down, he said.

New Hampshire also has a high-risk pool (for those who could not otherwise qualify for insurance) “which enables high-cost individuals to be served by a pool subsidized by all the carriers.”

“By taking these types of risks out of the larger pool, the health costs are lower, which keeps premium costs down,” Dugan said. “This attracts more subscribers which improves the risk pool.

“Unfortunately, due to Maine’s regulatory environment, the opposite happens,” he said. “That has caused the pool to shrink year over year and has created a dangerous dynamic in which healthier people drop their coverage as premiums rise, leaving behind an increasingly smaller and less healthy group of people that are insured, which in turn causes the cost of premiums to increase at a faster rate.”

It is certainly true that when younger, healthier people drop out of the insurance market the costs for the rest of us go up.

That does not mean, however, that I think Maine should copy New Hampshire’s approach to health care regulation.

Maine, more than New Hampshire, has passed laws and regulations that seek to protect vulnerable citizens, offering broad coverage, despite the expense. Perhaps some of these laws should be revised, but it is far too simple to suggest that New Hampshire is right, Maine is wrong.

I can think of 770 reasons to argue that rather than accept annual rate increases as normal, legislators should review what Maine requires of insurance companies and whether there should be changes.

David B. Offer is the retired executive editor of the Kennebec Journal and the Morning Sentinel. Email [email protected]


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