Insurance by Politics
What's more interesting than a rate hike in the individual health-insurance market? Nothing, apparently, as both Democrats and Republicans this week suddenly seemed fascinated by Anthem's request for a 20.5 percent increase for its high-deductible
insurance product.
More precisely, they seem fascinated by the opportunity to blame each other for its existence. The shame of this is that none of them cared enough previously -- this would be the third year of double-digit increases in this product -- to carry out Maine-based, detailed studies on why the rate is rising so fast and how alternatives might affect it.
Democratic House Speaker John Richardson says he intends to "ask tough questions" about the increase. He's going to need a lot of information not available to the public to do that. Anthem makes public aggregated numbers through what is known as a Rule 945 filing, but it says dollar figures specific to its Healthchoice, the individual insurance policies in
question, are proprietary.
Speaker Richardson was reacting
to Republican gubernatorial candidate, state Sen. Chandler Woodcock's complaint that the Baldacci administration hadn't done enough to bring down health-care costs. But lawmakers don't actually know what the effect
of the governor's reforms have been on Healthchoice -- no one's seen the numbers.
The 945 filings themselves are fairly new, having been instituted as part of Dirigo, but they are insufficient to provide the proper level of detail. (Interestingly, Anthem does report through the filing it was able to yield a small profit in 2005 on the Dirigo health individual plan, which has far lower deductibles than the $5,000 to $15,000 deductibles in the private version and broader coverage.) Clearly more extensive public filings are required if politicians are going to do more than fulminate about this issue.
Anthem, for its part, is declaring that it has hit a death spiral in the individual market -- a point at which rising costs cause healthier people to switch away from the product, leaving sicker people in the market, who cause costs to rise, etc. It wants a high-risk pool, something Maine once had and abandoned, and its argument is that 1 percent of its individual market, about 200 people, account for 40 percent of the cost. High-risk pools make insurance affordable to the very ill through subsidies, either from taxpayers or through a surcharge on health-insurance premiums. Several Maine Republicans support this idea, though they oppose subsidized insurance through health-care efficiencies in Dirigo.
Though Insurance Superintendent Al Iuppa predicted a death spiral a couple of years ago, Anthem has yet
to demonstrate that it is in one. The number of contracts it had for this market over the last five years are as follows: 2001, 26,235; 2002, 28,192; 2003, 32,314; 2004, 35,461; 2005, 32,722. The company says utilization is way up but, again, is reluctant to release numbers detailing that claim.
One aspect of Dirigo everyone seems to agree on is the gathering of health-care data to produce better outcomes. The political battle witnessed this week among many state lawmakers is, at one level, an inevitable part of a campaign season, and, at another, a useless exercise when the health of Maine's public is at stake. Transparency of costs, so these debates can lead to effective reform rather than merely more argument, is the best response to unaffordable prices.