Anthem is starting to notify customers that their rates are going up in part because of a state-imposed assessment being levied on insurance companies to support DirigoChoice, and even those enrolled in that state-subsidized plan are being required to chip in.
Notices going out to DirigoChoice members up for renewal in January say, “as a result of the Dirigo Health Act in Maine, your rates include both the savings and a savings offset payment amount.”
Anthem is a partner with the state in offering DirigoChoice to small businesses and the self-employed. A similar notice is going out to all Anthem customers in their January bills.
“We felt we needed to be upfront with people that members are getting the benefit of savings from Dirigo Health as well as the savings offset payment,” said Anthem spokesman, Mark Ishkanian. “In effect members are paying no more in premiums than they would have paid if Dirigo did not exist.”
Gov. John Baldacci has promised to push a bill this session that would prevent insurance companies from passing on the assessment, which is supposed to represent savings to the system as a result of Dirigo Health legislation. It created the subsidized insurance plan and established a voluntary cap on hospital profits and spending.
The state will collect $43.7 million through the assessment in 2006 from insurance carriers and self-insured businesses.
Karynlee Harrington, the head of the state’s DirigoChoice agency, said the average rate increase for customers renewing this month is 9 percent, but some rates are going up as much as 15 percent depending on the number of people covered under a policy, their age mix and type of work.
Some customers have called about the notice in their renewal letters and want to know how much of their rate increase is attributable to the savings offset payment. The state contends insurance carriers should push back and renegotiate contracts with healthcare providers to capture savings brought about by Dirigo Health initiatives. The notice going out to policy holders “should stop with ‘savings are reflected,'” Harrington said, and not talk about the assessment.
Ishkanian said it is wrong to think about the insurance companies as somehow hoarding the savings and not passing them onto customers.
“This notion that some have made that somehow we’re segregating those savings and accumulating them in a room somewhere and not passing them through is wrong,” Ishkanian said. “We want to see healthcare costs be as low as possible.”
“Unfortunately there’s just confusion out there, ” Harrington said, and the argument changes depending on which side of the debate you’re on. “The person that’s paying gets caught in the middle.”
Anthem was the only company that bid on the chance to partner with the state in offering DirigoChoice, a program that was supposed to target the state’s 135,000 uninsured. Of the 7,400 people enrolled in the program as of the end of 2005, only a quarter had been previously uninsured. The state now plans to use some of the assessment to expand Medicaid coverage in 2006.
The insurance is priced like other Anthem policies aimed at small businesses and individuals, but the state subsidizes premiums based on a sliding income scale.
A consortium of insurance carriers, including Anthem, and the Maine State Chamber of Commerce are suing the state over the way the assessment was calculated, and the most recent court filings challenge the use of the savings offset payment to expand Medicaid.
“We don’t feel that it’s authorized by the Dirigo legislation as passed in 2003 or as amended. The savings offset payment is supposed to be used for the subsidy of income-eligible Dirigo enrollees and to fund the operation of the Maine Quality Forum. Those are the only purposes for which the savings offset payment can be used,” said Kristine Ossenfort of the Maine Chamber.
The appeals to the assessment are expected to be heard in February or March – about the same time bills for the assessment are being mailed out to insurance carriers and self-insured companies.
Send questions/comments to the editors.
