Douglas Rooks

Douglas Rooks

A recent news story reported that Maine Community Health Options, a fledgling nonprofit insurance cooperative, was besting giant for-profit insurer Anthem by three to one in the individual insurance market as Mainers begin signing up for policies on the Affordable Care Act insurance exchange.

The story said the reasons were “unknown.”

To the contrary: We have a really good idea why consumers would prefer a Maine-based nonprofit to Anthem.

It was Anthem that, in 2000, bought out the nonprofit Maine Blue Cross and turned it into a money-making juggernaut.

Blue Cross, despite its flaws, had for many decades done a reasonably good job balancing the needs of consumers against the imperatives of health care providers, who were already in the midst of what became the astonishing case of American health care cost inflation. Over the past three decades, it’s driven prices to stratospheric highs against the world market.

Blue Cross was in financial distress, in large part because it didn’t want to saddle consumers with huge rate increases. Anthem had no such compunction. It moved in with double-digit annual increases for individual policyholders that quickly turned Blue Cross’ deficits into healthy surpluses.

If Blue Cross had been willing to ask for similar increases, it would still be in business in Maine.

Anthem performed the same kind of invasive surgery for Blue Cross plans across the country. It even absorbed California’s Well- Point, the nation’s largest nonprofit, and, along with Aetna and Cigna, is among the nation’s most profitable publicly traded companies.

From Gov. Angus King on down, nobody raised any real objection to the Anthem takeover, even though for-profit companies, especially pharmaceutical companies, are chiefly responsible for the ruinous health care prices Americans can’t afford, but don’t know how to stop paying.

Mainers do remember. When they finally had a chance to pick someone other than Anthem, they did — in large numbers.

The state co-ops such as Maine Community Health Options are the remnant of the “public option” proposed for the ACA. The idea was to launch a public, nonprofit insurer nationally that could effectively compete with the Anthem-Aetna-Cigna colossus.

President Obama never pushed for the public option, which might have told us what health care really has to cost. Hint: It’s not 50 percent higher than anywhere else.

But Congress did provide startup funding for the state co-ops, and they’re becoming one of the ACA’s most interesting experiments. Not every state has them. In New Hampshire, consumers are stuck with Anthem, although more companies may enter the market in 2015.

Unfortunately, funding for coops was reduced from $10 billion to $3.8 billion, a product of the never-ending Republican campaign to promote private healthcare profits over public efficiency. MCHO had to do some fancy footwork to get funded, but it did.

Significantly, the main concepts behind the Maine co-op plan were developed for a managedcare network that the Baldacci administration ordered for Medicaid, but which the LePage administration canceled immediately upon taking office.

Better to complain about Medicaid costs, as Paul LePage never tires of doing, than to actually do something about them.

So MCHO has a model that stole a march on Anthem. Will it be successful?

It’s too soon to say. Anthem, like the other giant insurers, can cut its rates if it wants to regain market share. But it also has a reputation, and in Maine it’s none too good.

If further convincing is needed, we should remember what Anthem did to Dirigo Health’s insurance plan — the once promising 2003 health initiative that was a model for “Romneycare” in Massachusetts, and for “Obamacare” nationally.

In its initial design, Dirigo was supposed to create a state-chartered, nonprofit health insurer, on the model of Maine Employers Mutual, which revolutionized worker’s compensation insurance in the 1990s, dramatically lowering rates while improving safety.

John Baldacci was talked out of the nonprofit insurer, and Anthem’s behavior, after becoming the sole bidder for the Dirigo Choice insurance plan, was outrageous. Even while charging suspiciously high rates — it was widely, and probably correctly, believed that Anthem didn’t want to undercut its other insurance offerings — it took the state to court repeatedly over the surcharges used to provide Dirigo subsidies for low-income buyers.

Anthem never won a case against the state. It never even won a motion.

But it didn’t matter. Anthem’s hardball tactics helped sour public opinion on Dirigo, and ensured that Dirigo would never become a major insurance option.

Now we have Maine Community Health Options, which can be considered a spiritual successor to Dirigo Choice. It’s still early, but this time it looks like it may work.

DOUGLAS ROOKS is a former daily and weekly newspaper editor who has covered the State House for 29 years. He can be reached at [email protected]

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