Anthem Blue Cross & Blue Shield and Maine’s Attorney General’s Office squared off in a Portland courtroom this morning over health insurance rates.

Christopher Roach, the attorney representing Anthem, told a Superior Court justice that a state-ordered 10.9 percent rate increase for individual health insurance policies was unfair and too low to make a profit.

Anthem is appealing a decision made last year by Maine Insurance Superintendent Mila Kofman to deny the company’s 18.5 percent rate increase request and eliminate a customary 3 percent margin to cover profits and higher-then-expected costs.

The decision singled out Anthem for unfair treatment and made it likely the company will lose money on individual policies this year.

Assistant Attorney General Thomas Sturtevant defended Kofman’s decision, saying she struck a balance between allowing Anthem to cover its costs while trying not to force struggling policy holders out of the market. He said Kofman had the authority to consider the “extreme financial health” of Anthem and the hardship facing policy holders during the recession.

Anthem provides individual health insurance to about 20,000 people who don’t get coverage at work and don’t qualify for government insurance programs. Individual insurance rates have been rising especially fast and the latest round of proposed increases in Maine and other states – Anthem has asked for a 23 percent increase for next year – became a rallying point for those who favored the national reform law passed this week.

The new federal health reform legislation is expected to help control individual policy premiums starting in 2014.