Anthem Requested Rate Increase

[Winter_123]

Anthem just asked the state for a 23% rate increase in Maine and they have about 78% of the market. The state will given them about an 6% increase regardless of what their claim payout data looks like because the regulators say that their parent company is making "too much" money at the national level regardless of what the Maine market looks like.

It's mess. What will the state do when Anthem decides to pull out of the Maine market? Declare martial law and tell them they have to stay or what. Who knows. Dump it on to the feds and declare vicotory.

 

[somarco]

Looks like DC hasn't cornered the market on *** regulators and elected officials.

The issues you are witnessing in ME will be amplified if we get Obamacare. With Congress dictating benefits, loss ratio's and premium rates carriers may well pick up their bat & ball and go home.

And they may well do so on short notice.

 

[Winter_123]

Looks like DC hasn't cornered the market on *** regulators and elected officials.

The issues you are witnessing in ME will be amplified if we get Obamacare. With Congress dictating benefits, loss ratio's and premium rates carriers may well pick up their bat & ball and go home.

And they may well do so on short notice.

Indeed but the not so subtle development is that the state already dictates loss ratios but is now saying that that is no longer the threshold for justifying a rate increase.They are essentially saying now that the overall earnings of the company regardless of payouts and margins will be or can be the test. In other words, if this were Walmart, you could not meet the test even by having the lowest prices in town because if they are looking at your books and still seeing that you could give even more then that is what they are going to decide. The goal is not to limit your margins. It is to limit your profits.

This is just classic socialism where the regulators decide how much you should be making and then they back the numbers into it. This is going on in several industries right now. And don't expect socialists to be able to distinguish profits made from high market share and low margin/high volume from price gouging. It is all sort of mushed together for them.

So if Anthem were a standalone venture in Maine it would be losing money but they are asking the parent corporation to cover it (I guess that is Wellpoint, not sure.). As discussed extensively, the socialist view is all about cost shifting and not cost containment. We fuss about public dollars from other states being used to subsidize Nevada but then we tell other states that parent corporations are going to be used as vehicles for transferring consumer premiums from one state to another to cover costs. Problem is, next week another state decides to not allow an increase on their premiums and a snowball effect starts.

Also, I would not assume that in the future that carriers will be able to pull out of losing markets. The feds will brand this as cherry-picking. You might be able to pull out of some mega-market, such as deciding to not do business in the Northwest which is the feds Region 9 or something like that. States dont mean much to the feds. They are are not only going to keep you from getting out of some markets, they are going to force you into some markets as a condition of doing business. You want to do business in North Dakota? You just agreed to cover the Indian tribes there too.

Note: No love for Anthem is implied in this post. I am just trying to decipher the rules of the road as we go along. I think the feds are going to tell the states what the claims payout rules are but in the end if you still make money they are going to change the rules just as in my state.

Similarly, we can worry our pretty little heads off analyzing what the "rules" and opportunities will be for agent commissions. Hard to tell though, because they know how much we should be making and they will adjust the numbers accordingly. CMS/Medicare Advantage anyone?

Change you can believe in.

 

[ins.dave]

Similarly, we can worry our pretty little heads off analyzing what the "rules" and opportunities will be for agent commissions. Hard to tell though, because they know how much we should be making and they will adjust the numbers accordingly.

This bit here, to me, is about the most cogent, pertinent thing stated thus far since this all started back in June.
Sums it all up.
It's a Pandora's box in many ways. Don't get excited Al ... it's a metaphor. Once the lid is opened ...
I have to say it really is so much bigger than just us and our "six figure incomes ..."
Personally, I need a fight in my life. I live to compete and to try and build something.
Call me a romantic, but to me that is the best of this country. Or any country.
And as 80% of all jobs are created by companies of less than 5 employees each ...
We need a reason to get up in the morning to try and do the best that we can at what it is that we are working at? Govt. involvement drains the spirit out of people and removes one's will to excel. There becomes no reason to as Winter stated because they will just change the rules mid game all the while feathering their own nests.
I keep thinking about this recent client; an Albanian immigrant. Try and sell her on the virtues of govt. involvement and socialized anything much less healthcare.
I'd LOVE to watch a conversation on this between her and our boy from Cali. Now, although, in the interests of self respect I discontinued our cable bill, I'd pay money to see that ... maybe on C Span?

 

[maleman2045]

23% increase with 78% of the market???
Was there some unpublished epidemic in Maine that primarily affected seniors or were the actuarians asleep at the wheel here??

I may have had sympathy if they had less than 10% of the market, but with 78%, there should have been enough cushion in collected med supp premiums to cover "excessive" claims.

Sounds like poor business management to me..

 

[Mr. Bill]

Didn't they do this last year as well? Seems to me like I've read this before....I'm having deja vu all over again.

 

[dgoldenz]

23% increase with 78% of the market???
Was there some unpublished epidemic in Maine that primarily affected seniors or were the actuarians asleep at the wheel here??

I may have had sympathy if they had less than 10% of the market, but with 78%, there should have been enough cushion in collected med supp premiums to cover "excessive" claims.

Sounds like poor business management to me..

What does med-supp premiums have to do with individual health insurance?

If State Farm's life insurance was profitable and their car insurance became unprofitable, do you think they would raise the car insurance rates, or would they just say "well, our life insurance is profitable....we'll just let the auto insurance operate at a loss"?

 

[ins.dave]

23% increase with 78% of the market???
Was there some unpublished epidemic in Maine that primarily affected seniors or were the actuarians asleep at the wheel here??

I may have had sympathy if they had less than 10% of the market, but with 78%, there should have been enough cushion in collected med supp premiums to cover "excessive" claims.

Sounds like poor business management to me..

Well, without seeing any of the numbers such speculation is meaningless?
Remember, 78% share also means a lot of claim activity.
Also, probably more claim activity in MA than elsewhere because as it is a GI state there is significantly less incentive for people to live a healthy lifestyle?
I'm just say'n let's not be too quick to jump on board the American *** rational of hating / blaming ins. companies from the get go?
If they had kept their beaks out of MA then we would have the REAL competition as well as risk dispersal working for us that a state with multiple companies would be providing?

 

[somarco]

I would not assume that in the future that carriers will be able to pull out of losing markets. The feds will brand this as cherry-picking.

They already do this on the P&C side. Try to find a carrier still offering HO insurance in FL.

The scenario you propose is tantamount to saying that the govt can tell GM they have to sell cars at a loss because they can make it up elsewhere in their parts division.

 

[Norwayguy]

23% increase with 78% of the market???
Was there some unpublished epidemic in Maine that primarily affected seniors or were the actuarians asleep at the wheel here??

I may have had sympathy if they had less than 10% of the market, but with 78%, there should have been enough cushion in collected med supp premiums to cover "excessive" claims.

Sounds like poor business management to me..

This is in their Individual Health area... Hey Winter how come we don't hear about Dirigo increases because I know for a fact that they also have large increases.