Maine Wins Anthem Case; States Prime for PPACA Work

Late yesterday, the Maine insurance department announced that the states’ superior court affirmed a May 18, 2009 decision by Superintendent Mila Kofman denying Anthem Health Plans of Maine a proposed 18.1% average rate increase for individual health plans in 2009.

In his April 21 decision, according to the Department, Superior Court Chief Justice Thomas Humphrey stated that it was not improper for the Superintendent to consider the state of the economy and the profits from Anthem’s other lines of insurance in making her decision on the proposed increase.

In January of 2009, the Department chronicled that Anthem requested an average increase of 18.1% on its HealthChoice and Lumenos products. Following public comment sessions and a public hearing in March 2009, Kofman denied the request and instead approved an average increase of 10.9%. The increase became effective on July 1, 2009. Anthem had requested a 3% profit and risk margin in its rates, and appealed the portion of the Superintendent’s decision denying any profit and risk margin for individual plans in 2009. Oral arguments in the appeal were held on March 23, 2010.

Anthem’s 2010 individual rate filing is still pending, the Department says.
The decision comes as states are pooling their efforts to address the new health care law, The Patient Protection and Affordable Care Act. Kathleen Sebelius, Secretary of the Department of Health and Human Services, outlined the joint efforts such as better fraud prevention oversight that will be needed in order to improve health care for Americans. Sebelius outlined joint federal state initiatives during her testimony on the 2011 proposed HHS budget before a subcommittee of the House Appropriations Committee.

At the National Association of Insurance Commissioners, Kansas City, Mo., state insurance regulators are already starting the work that they discussed during the spring meeting in Denver immediately after the new law was signed by President Barack Obama.

One of the first items regulators need to address with very quick turnaround is preparing a response for a May 14 deadline to a list of over 40 questions posed by the HHS and published in the Federal Register. In order to do that, regulators have to present their findings to commissioners by the end of April so that commissioners can come to a decision and weigh in to HHS by May 14.

After completion of this task, regulators will then need to turn their attention to a June 1 deadline to respond to a letter from Secretary Sebelius.
Toward that end, the NAIC’s Accident and Health working group will be holding conference calls twice a week and possibly more if needed. Steve Ostlund, an Alabama regulator is overseeing the effort with Julia Philips of Minnesota handling rate review and Rick Diamond of Maine handling the medical loss ratios.

During a recent discussion on how the issue will be handled, Bill Weller of Omega Squared requested time between calls so that interested parties could offer comments. But Philips and other regulators explained that because of the tight time frame, regulators will not be taking comments but discussing these two issues on calls with interested parties and then developing their position.

Updated information on the progress of state regulators’ work at the NAIC can be viewed at a new website created by the NAIC:

NAIC Health Reform website

According to the NAIC, there are 12 issues that regulators will address including:
--medical loss ratios;
--rate reviews;
--standard definitions, disclosures and uniform summary of benefits;
--uniform enrollment;
--individual and group market reforms;
--exchanges;
--data collection by the HHS Secretary and states;
--Medigap reforms;
--interim reinsurance program and risk adjustment mechanism;
--uniform fraud reporting form;
--interstate compact standards; and,
--external review.