AUGUSTA  — A judge has upheld the state insurance superintendent’s decision last year to deny an 18.1 percent rate increase proposed by Anthem Health Plans of Maine Inc.

In his decision, dated Wednesday, Superior Court Chief Justice Thomas Humphrey said it was not improper for Superintendent Mila Kofman to consider the state of the economy and the profits from Anthem’s other lines of insurance in approving a smaller increase than the company sought.

In January 2009, Anthem requested an average increase of 18.1 percent on its HealthChoice and Lumenos products for individuals.

After public comment sessions and a public hearing in March 2009, Kofman denied the request and instead approved an average increase of 10.9 percent, which took effect for more than 12,000 policyholders on July 1.

Anthem sued, arguing that it was being treated differently from its competitors and that it should not be required to offer health coverage to individuals at a loss, even during a recession.

Humphrey heard arguments on March 24. His ruling applies only to the rate increase that Anthem requested in 2009. Still pending is the company’s proposed 22.9 percent increase for two individual coverage plans for the coming year.

Anthem, Maine’s largest health insurance carrier, hasn’t decided whether it will appeal this week’s ruling.

“We are in the process of reviewing the court’s decision and have not yet determined our next steps,” said Anthem spokesman Christopher Dugan. “That said, we stand by our position that filed rates need to both cover the medical costs for our members and allow for an adequate risk margin to cover unanticipated costs.”

A ruling in favor of Anthem likely would have sent the decision back to Kofman for an adjustment.

In response to the ruling, Kofman said, “It is good news for Maine consumers that the court has affirmed the authority of regulators to consider all relevant factors in deciding whether proposed insurance charges meet the legal requirements.”

The court found that rates for individual health insurance meet the legal standard if they cover the ability of the insurer to “sustain projected losses and expenses,” and that Maine law does not “expressly entitle insurers to a mandated profit margin.”

Attorney General Janet Mills, whose office represented Kofman, said Maine law does not guarantee health insurance companies “millions of dollars in additional profits.”

She said small businesses and the self-employed in Maine struggle to afford even the most basic health care coverage.

“We must take responsible steps to prevent health insurance from becoming all but unaffordable, while allowing health insurers to cover the cost of doing business,” Mills said.

The court’s decision affirms that Kofman acted within her authority in granting Anthem the average 10.9 percent rate increase, which includes a zero percent profit and risk margin.

The court also found that the superintendent properly relied on the existence of Anthem’s surplus from all lines of insurance to cover, if necessary, claims and expenses arising from the individual policies.

Company executives said last month that operating costs had increased 6 percent to 8 percent in the past year, and that new treatments and medicines had increased costs that much again.

Dugan, the company’s director of corporate communications, has said that Maine has experienced a much larger increase in costs than other states because state law doesn’t allow a high-risk insurance pool and requires insurance companies to cover anyone who wants coverage.

Dugan said healthier people opt out of insurance, creating a pool of people who are less healthy and more expensive to insure.

Anthem purchased the nonprofit Blue Cross and Blue Shield in 2000. Like other insurance companies, it must justify its rate increases to the Bureau of Insurance.

The Associated Press contributed to this report.


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