Anthem BCS of Maine Claims Constitutional Right to 3 Percent Profits

Igor Volsky reports:

Anthem Blue Cross and Blue Shield of Maine, the state’s largest private insurer, is suing the state after Maine’s Superintendent of Insurance denied Anthem a rate increase that would have required Maine residents to pay an “additional $12 million in annual premiums for the same level of benefits.” Under Anthem’s proposed increases, the average policyholder would have had to spend “more than $13,000 in premium and deductibles, prior to becoming eligible to receive any health benefits under the policy.”

After reviewing Anthem’s annual rate increases for policies sold within the individual health insurance market, Maine rejected the company’s proposed rate increase of 18.9%, but allowed the company to “break-even” in its individual market division and increase “rates by just 10.9%.” According to court documents obtained by the Wonk Room, Anthem, a subsidiary of Wellpoint Inc., argued that beyond simply ‘breaking-even’, the government must guarantee the company a 3% profit.

I have to agree with Robert Waldmann that this sounds an awful lot like an insurance industry mole is trying to convince Olympia Snowe and Susan Collins to support a strong public option. I’m not sure what other industry move I could imagine that would be more likely to have that result.

In other Maine political news, there’s surely some way that federal health legislation can be amended so as to resolve this herring issue. Basically, science indicates that Maine fishermen need to catch less herring. And herring is used to bait lobster traps. So cutting the herring catch will be bad for lobstermen and of course bad for those who catch herring. The whole thing is a big controversy important to a key local industry. But the actual dollar sums of money involved are almost laughably small:

A small fleet of Maine boats caught about $8.3 million worth of herring last year, according to state data. Most of the catch is sold as bait to the state’s $244 million lobster industry, while a smaller portion is used for canned sardines or other processed fish products.

In lieu of substantive policy concessions, if I were Harry Reid I’d be looking hard at what kind of $5 million herring bailout I could organize.