The state needs legislation reforming the individual insurance market. Regulations the state adopted in 1993 are stifling competition and making insurance unaffordable for almost anyone who doesn’t get it through an employer.

Anthem is trying to rally the estimated 25,000 people covered by its HealthyChoice plan to lobby the Legislature to pass reforms. The company sent out letters this week to people with individual insurance policies.

While Anthem could be accused of arguing for reforms that will ultimately improve the company’s bottom line, it’s impossible to ignore the numbers. Since 2001, individual insurance rates have gone up in double-digit increases nearly every year, and in some years those increases have approached and even surpassed 20 percent. Anthem has proposed an 18.6 percent rate hike for individual policies this year.

There seems to be no end in sight to the huge rate hikes. And, with very little competition for Anthem in the market, it’s hard to imagine anything other than market regulation reform driving rates down.

While some lawmakers might point to the recent decision of Massachusetts-based Harvard Pilgrim to take over for Anthem as the state’s partner in the DirigoChoice program as a positive sign, that company would have to begin growing its customer base in Maine aggressively for it to have any kind of impact on individual rates, which have been increasing sharply for years. Even if Harvard Pilgrim were to expand its business in Maine rapidly, there’s no guarantee rates would go down soon or that more competition would follow. If history is any indication, both are unlikely.

Anthem is seeking the repeal of regulations passed in 1993 that required insurance companies to extend coverage to everyone, including those with serious medical conditions. While the legislation was well intended, it has had disastrous consequences for most health insurance consumers.

Because of the regulations, many companies decided not to offer health insurance in Maine. The few that remained raised their rates for everyone to cover the cost of serving the smaller pool of high-risk, high-cost consumers.

To cover the cost of paying for more expensive policies, many individuals have been forced to take on high deductibles – money they will pay toward medical expenses before Anthem pays a dime. A majority of people in Anthem’s HealthChoice plan have $5,000 deductibles, and 30 percent have $15,000 deductibles.

As more and more people have been forced to drop their health insurance coverage altogether, Anthem has begun to warn of a “death spiral,” in which rates spiraling out of control lead to the end of the market for individual health insurance. While some might like to see the market collapse so that Dirigo could take over, that does little to help consumers, who have needed relief for years. And, so far, Dirigo has largely been an expensive and ineffective program. Why should consumers have any confidence in the Dirigo program as a way out of this mess?

The state needs to unhitch the health insurance market and reform legislation from Dirigo and pass a law that would actually help consumers.

Brendan Moran, editor

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