GARDINER — Five Anthem Blue Cross and Blue Shield policyholders gave sworn testimony Monday on their insurance company’s latest request to increase rates, testimony that uniformly denounced the proposed rate hike.

If accepted by the state’s Bureau of Insurance, Anthem customers can expect an average increase of 9.7 percent, up to a maximum of 19 percent. Approximately 11,000 policyholders, who paid an annualized premium of approximately $62 million in 2010, would be affected by the rate revision. The rate increases apply only to individual policies, not those covered in large pools such as those offered by employer-based health care plans. The rate changes would take effect July 1. In total, Anthem has about 400,000 active policies in Maine.

Those increases are “outrageous,” according to Peter Beckman, 62, of Sidney, who testified at Monday’s hearing. Beckman said by his calculations, his policy rate has increased 328 percent since 2001.

“How does Anthem get away with this?” Beckman, a retired municipal attorney, asked the panel.

In a letter sent to policyholders in February, Anthem said the premium increase is necessary “to keep pace with the rising costs of health care.”

Each year, the Bureau of Insurance must assess Anthem’s rate increases and ensure they are not excessive, inadequate or discriminatory. Last year, Anthem requested a rate increase of 23.1 percent, but the bureau approved a smaller hike of 14.1 percent. The insurance company appealed the decision and litigation is pending.


Tammy Bard of Lisbon Falls told the panel that her family paid $11,355 to insure her family of four last year, in addition to more than $1,000 in out-of-pocket health care costs. For all this, she said, Anthem paid out only $536 in benefits.

“Somethings got to change,” Bard said. “If this increase goes through, we won’t be able to afford the policy.”

Bard’s husband, Steven, sat in the audience as his wife gave her testimony. He said he couldn’t speak before the panel because he was too angry.

“I’m absolutely outraged,” Steven Bard said. “I don’t understand how they can ask for even more.” He said his family switched to a high-deductible plan, Anthem’s Luminos $10,000-deductible individual plan, to avoid higher monthly rates. “I’d go out of business if I raised my prices like this every year,” he said.

Christopher Dugan, a spokesman for Anthem in Maine and New Hampshire, said the increase request is a product of Maine’s unique insurance regulations, and accurately reflects the operating costs needed to do business in Maine’s individual market.

He said that because Maine has required insurance companies to guarantee coverage regardless of medical history, and because Mainers can freely opt in and out of their policies, there is “adverse selection” of who stays in the individual insurance pool.


“As a result of that, if people in this particular insurance pool feel they aren’t using their benefits as rates go up, healthy people leave the pool,” Dugan said. “As the pool gets smaller, the people most likely to need it are the ones using the service.”

“It’s hard to predict the risk,” Dugan said. “These rates reflect the resources needed to take care of those left in the pool.”

Dugan said that despite the premium increases year after year, Anthem is not turning a huge profit on the individual market. He said that in 2010, the company paid out 98.5 cents in claims for every dollar it took in from premiums. In 2009, Dugan said, the company actually spend $1.04 for every dollar brought in.

Monday’s open session was the last in a series of hearings since Anthem filed their proposal for rate increases in February. The Board of Insurance will hear testimony from actuaries and representatives from Anthem, the Attorney General and Consumers for Affordable Health Care at a hearing today at 9 a.m. in the Kennebec Room at the Department of Professional and Financial Regulation, 76 Nornern Ave, Gardiner. The public is invited to address the panel.

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