Last summer, Anthem, Connecticut’s largest health insurer, requested rate increases ranging from nearly 23 percent to 30 percent for several lines of business, including HMOs, consumer-driven health plans, and its Tonik policies aimed at young adults. The matter went to a hearing, where a hearing officer reduced the rate increases to between 16.6 percent and 20 percent. “I believe that Anthem was tone deaf to the realities facing their policyholders,” said insurance commissioner Thomas Sullivan. “Their timing was terrible, and the requested increase unjustified.”
In Maine last summer, Anthem sued insurance superintendent Mila Kofman when she reduced Anthem’s requested increase from 18.5 percent to 11 percent. The reduction apparently left the carrier without a profit margin, so it went to court contending that it needs at least a three percent margin for the individual market policies it has been selling. Next month the court will hear oral arguments.
So what is the public to make of all this? Yes, the latest Anthem news invites more scrutiny of the rates health insurers charge. But there’s a larger question for the media to ponder: Will even the strongest regulation tame the insurance industry? In our post on the Maine brouhaha, we noted that too often companies have sidestepped the rules, suing whenever they dislike something a regulator has done.
Take the practice of rescinding policies when carriers find that consumers have lied or misrepresented information on their applications. An investigation by the House Subcommittee on Oversight and Investigations showed that companies including WellPoint had canceled more than 20,000 policies and praised employees for targeting policyholders with costly illnesses. Yet insurance executives told Congress that they would not agree to limit rescissions to policyholders who intentionally lie or commit fraud on their applications. In other words, when the heat’s off, they admitted it will be business as usual. If reform moves forward, the media need to keep asking if Congress will allow other states to turn down big rate increases—or if they’ll let the industry write the laws, thus keeping regulators as powerless as they now are in California?
When we published the Maine post in October, we suggested that the Anthem lawsuit was the beginning of a big story. Now is the time to go for it.