Foster's Daily Democrat: Shaheen Wants Big Health Insurer to Justify Rate Hikes

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By Adam D. Krauss

U.S. Sen. Jeanne Shaheen wants the nation's largest health insurer to justify steep rate increases on individual premiums, which are in the order of 12 to 13 percent in New Hampshire and nearly 24 percent in Maine.

"It's hard to justify those kind of rate increases when the company's profits increased ... almost $5 billion in 2009," she said in an interview Thursday.

"While I appreciate costs are rising, their profits are rising too. So I think it's hard to justify in this economy increasing rates the way they're talking about and have already done on small businesses when the economy is so bad. And we know those rate increases will force more and more people to give up their health insurance," she added.

Shaheen, D-Madbury, has asked the chairman of the Senate Health, Education, Labor and Pensions Committee, Sen. Tom Harkin, D-Iowa, to open a congressional investigation in the increases. Harkin's office has said it will look into the request, according to Shaheen's office.

Shaheen penned her frustration in a letter to Angela Braly, president and CEO of WellPoint Inc., on Wednesday, when the executive was testifying on Capitol Hill on rising costs and the Center for American Progress Action Fund released a report on the premium increases.

Braly had yet to respond to Shaheen as of late Thursday, but Chris Dugan, a spokesman for Anthem Blue Cross Blue Shield, a subsidiary of WellPoint, said "we are reviewing the letter and we will respond appropriately."

In her testimony Wednesday, Braly said the rate increases were the result of "general medical inflation" and a "significant change in the risk pool."

"The increases in premium costs are driven by prices charged by clinicians, hospitals, medical device manufacturers, pharmaceutical companies and other suppliers in health care that are accelerating much faster than general inflation as well as increases in consumer utilization," she said.

Maine and New Hampshire are two of 11 states already or potentially impacted by the double-digit increases, according to the "progressive" think-tank center's study, which said the hikes justify the need for health care reform.

Mike Wilkey, director of life, accident and health at the N.H. Department of Insurance, said 80 cents of every dollar spent on insurance accounts for claims covering the cost of service.

New Hampshire approved the 12 to 13 percent jump in time for it to take effect this year after an actuary reviewed WellPoint's request, which came in this fall.

The state's medical costs are running about 12 to 15 percent above last year, Wilkey said.

"In essence, that's what the Anthem increase is -- it's trend," he said. "We have to look for what's reasonable and what they submitted was reasonable. And based on the claims they provided to the department, which were based on the premiums they earned over the previous year, it was reasonable relative to what their projected costs are going to be going forward," he said.

Last year, small business premiums, which account for groups up to 250 people, increased by 17 percent.

"You don't see this increase all at one," Wilkey said. "You see it building over the course of the year. What claims you see today won't be the claims you see tomorrow."

Wiley said the department is concerned with the level of costs, "not only today but where it's headed tomorrow."

In a statement, Congressman Paul Hodes, D-Concord, said without reform family health insurance plans, which today average $989, could climb nearly $500 a month over through 2014.

In Maine, Anthem is seeking an individual rate adjustment for its HealthChoice and Lumenos products, which will produce on average a nearly 23 percent increase for 11,066 policyholders. Last year, it sought an 18.5 percent increase for HealthChoice but the state only approved a 10.9 percent jump, prompting an appeal by the insurance company.

Going back to 2001, approved individual rate increases for HealthChoice have been on average 13 percent, with the greatest being the 23.5 percent jump in 2001 and the least being the 3.4 percent change in 2003.

MEGA Life and Health is also seeking rate changes -- 21 percent on 861 small group plans and 12.5 percent on its 6,890 individual policies.

Unlike New Hampshire, Maine holds off on decisions until there is a public hearing on the proposals.

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