Insurance rate hikes in N.H. are questioned

March 14, 2010

United States Sen. Jeanne Shaheen said she sees the increases in the health insurance premiums of Anthem Blue Cross Blue Shield of New Hampshire as emblematic of a disconnect between health insurance companies and rank-and-file Granite Staters - and all Americans, for that matter.

"When you see the profits that they've made, and you hear the stories of people who are desperate to pay their bills, something's wrong," said the New Hampshire Democrat.

New Hampshire individual and group ratepayers of Anthem in New Hampshire have not been subjected to the kind of spikes seen across the country, or even next door in Maine. While increases of 23 percent in Maine to 39 percent for some ratepayers in California are proposed, New Hampshire Anthem customers face a 12 to 13 percent increase in individual policies and 17 percent in small group policies.

In fact, unlike Maine, where the increase is pending and a decision by the state's insurance superintendent is not expected until mid-April, the New Hampshire Insurance commissioner has granted Anthem's request.

"The standard we use is that the rate increase can be neither excessive or inadequate," so that carriers are neither gouging customers or spreading themselves so thin they can become insolvent, said deputy commissioner Alex Feldvebel.

In Anthem's case, the company is clearly solvent. Anthem is owned by WellPoint Inc., which reported a $4.7 billion profit for 2009 over 2008. And when the commissioner looked at the claims paid out in New Hampshire versus the increase requested, said Feldvebel, "the increase was more than justified."

Douglas Wenners, president and general manager of Anthem Blue Cross Blue Shield of New Hampshire, said while it's easy to blame Anthem and WellPoint, it's instructive to look at other factors driving health care costs.

For example, New Hampshire has one of the lowest Medicare and Medicaid reimbursement rates in the country. As a result, said Wenners, hospitals are increasing negotiated costs to insurance providers to make up a portion of the difference. He said the contracts Anthem negotiates with the state's hospitals go up one-third every year. Moreover, he said, the economy has played a factor. Last year, there was a 25 percent spike in elective surgery in New Hampshire, which Wenners said is driven by the fact that people concerned about losing jobs opted to have surgery while they still had insurance through their work.

The reason for the higher spike in group rates, he said, is that New Hampshire requires providers to offer insurance to everyone regardless of pre-existing conditions or age, called "guarantee issue." Insurance companies can underwrite individual policies in New Hampshire, and - unlike in Maine, for instance - those who are refused a policy can get one through the state's high-risk pool. This quasi-governmental agency is self sustaining, and has on its board both the state and individual carriers.

It is primarily because of the high-risk pool that Anthem is not the only player in New Hampshire, although it has 50 percent of the market. In the individual market, there are eight carriers; in the small group market, 12 carriers.

N.H. Insurance Department spokesperson Kathleen Belanger said the department is expected next week to release a report detailing rate increase requests for all carriers. Until it is released, she said it would be difficult to provide that data to Seacoast Sunday.

Shaheen said any company that has such incredible profits like Anthem should not be looking at double-digit increases for their policy holders. She said she has spoken with colleagues, and is hopeful the Senate Health, Education, Labor and Pensions Committee will hold hearings on the hike.

"The simple reality is that middle-class families and small businesses can't afford these kind of rate hikes when insurance companies are posting massive profits," said Shaheen.

She said Anthem posted a 700 percent increase in profits in the fourth quarter of 2009 compared to 2008, and "there's no way" that profit should not be shared by all its policy holders in the form of lower rates.

In an attempt to bring a spotlight to rate hike requests for all health insurance carriers, state Sen. Martha Fuller Clark, D-Portsmouth, has introduced a bill to require a public hearing before rates are set.

The bill, SB 392, has been amended to include increased costs of services by hospitals and doctors. Under the terms of the bill, the insurance commissioner would be required to hold a public hearing each time a carrier requests a rate increase or doctors or hospitals increase costs.

All of that information would be compiled in an annual report.

"We need to understand what's driving the increase," said Fuller Clark. "The health care providers blame the insurance carriers and the insurance carriers blame the health care providers. Let's get it all out in the open, so the general public can understand what's going on."

By:  Deborah McDermott
Source: Portsmouth Herald