Maine Supreme Court: Anthem's Profit Can Be Limited

[Crabcake Johnny]

I've been watching this fight for some time now and the ruling just came out.

Anthem fought for a 9% increase last year citing that it needed to build in a 3% profit. Maine's response, to be simple, was "no company should be guaranteed a profit."

So they chopped the increase down to 5% which only allowed a 1% profit. Anthem said "you can't do that" but Maine's top court just say "oh, yes we can."

Maine's Top Court Backs State Authority To Limit Health Plan's Profits – Capsules - The KHN Blog

More to the heart of this matter was Anthem challenging that that state insurance regulator had the authority to limit their profit. Which means if they filed for a 9% rate increase but 3% of that increase was a built in profit, there was nothing the DOI could do about it. Yesterday's ruling was significant because it not only reaffirmed the DIO's authority to hold down rate increase, but limit a carrier's profit.

I feel mixed on this. One on hand, a carrier should be able to do what they want, within reason of course.

However, under the laws of the capitalist jungle, no company is guaranteed a profit and "forcing" consumers to pay a rate increase that includes a profit?

http://www.courts.state.me.us/opinions_orders/opinions/2012_documents/12me21an.pdf

 

[Norwayguy]

And if Anthem decides to take thief ball and go home? Anthem and its partially owned associations own the Maine market.

 

[Crabcake Johnny]

Wanna know what Anthem's gonna do? Shut up, tuck their tail and continue selling in Maine.

 

[YouGotMyMoney]

actually this would be very interesting if Anthem decided to call their bluff and pulled out of Maine. However, PR repercussions and the ripple effect it would have in other states would prob nix it.

 

[HealthGuy]

I would love to see them walk...pure entertainment.

 

[somarco]

In any other industry, over regulation results in operations closed and moved to other states, or even out of the country.

No company, regardless of the industry, is guaranteed a profit.

Carriers have already pulled out of the market due to constraints of Obamneycrap. Why would Maine needs Anthem more than Anthem needs Maine.

 

[Crabcake Johnny]

It would be cutting off their nose to spite their face. They're making a profit in Maine. Pulling out might not sit popular with their investors. Ironically, pulling out would mean attempting to raise rates in other states to make up for the loss in revenue.

Listen - it's over. Carriers can't impose their rate increases at will any more. Most carriers have already receive the memo. Apparently it's still making its way to Anthem.

Recently, the curtain has been pulled back on a lot of these rates increases. The Massachusetts AG's report is a great read.

Carriers: We need this big increase due to rising costs
DOI: Actually, we researched costs and they haven't risen last year

Carriers: Oh, well, providers are charging us more
DOI: No...they're not, guess again

Carriers: Well...ummm, our claims are going crazy
DOI: Actually, your claims are stable and you made more this year than last year

Carriers: Well, then sh*t

 

[taterpeeler]

Anthem is the sole reason we have health care reform.... all was quiet after the first round back in late 2009 early 2010 then anthem slamed the california market with some god awful over the top increase... pissed off the RIC obama man and rekindled the fire.... boom, health care reform

 

[Yagents]

Profits drive stock prices. If they are "for profit", why not just allocate stock to every citizen, and they'll get their money back through stock appreciation. Or, put the stock in a pool, and sell appreciated shares periodically to pay for indigent care, reducing pressure on that cost of care. Don't try to beat em', join em'

 

[YouGotMyMoney]

zzzzz why am i up so early? night' everyone