WellPoint Subsidiary Fights Maine Over Big Rate Hike (VIDEO)
Anthem Blue Cross and Blue Shield in Maine, a subsidiary of WellPoint, the nation's largest insurer, wanted the state to approve an average rate hike of 18.5 percent on its policyholders. Maine rejected the increase and now the insurer is fighting for the hike in court.
Robert Greenwald's Brave New Films is taking aim at Anthem's rate reach in the latest installment of his "Sick for Profit" series. The video, posted below, is a slick pitch for pitchfork-style outrage. It notes how much WellPoint pays its CEO ($9.8 million) and how much of its policyholders' premiums it spends on lobbying ($9.5 million). WellPoint's subsidiary in Maine says it needs the rate increase to guarantee a 3 percent profit margin.
"The only justification for this lawsuit is just pure greed," says Ali Vander-Zanden of the Maine People's Alliance in the video.
The Maine attorney general's office seems to agree -- in a Sept. 23 filing, in response to the insurer's claim that raising premiums is necessary for the financial health of the company, the AG says Anthem is perfectly profitable.
In its filing, Anthem said it had lost $3.7 million on its individual insurance products over the past five years. The AG says Anthem has made $5.4 million from individual consumers over the past two years, and points out that Anthem paid $75.7 million in dividends to WellPoint in 2008, $40.4 million in 2007, and $35.6 million in 2006. And its executives paid themselves pretty well, too.
"In 2006, Anthem executive compensation in Maine for its nine highest-paid employees totaled over $4.3 million, averaging almost $500 thousand per executive," the AG's filing says. "This included total base salaries of nearly $1.6 million, bonuses in excess of $835 thousand, and all other compensation of over $1.9 million (which may include payouts under multi-year long term incentive plans, sales incentives, severance, and the exercises of stock options granted in prior years.) ... During 2006-2008, the three-year average executive compensation for Anthem's top nine employees remained at nearly $500,000."
The attorney general points out how much Mainers already pay:
"In addition to the average annual premium of approximately $6,000 paid by Maine consumers to Anthem in 2008, these same individuals paid their own health care costs below the deductible. The average deductible as $7,250 in that year, and is projected to grow to an average of $7,570 in 2009... That means the average policyholder would have to incure a total cost of more than $13,000 in premium and deductibles, prior to becoming eligible to receive any health benefits under the policy."
The filing states that with the rate increase, Anthem's 12,000 policyholders in Maine "would have paid an additional $12 million in annual premium for the same level of benefits."
Oral arguments are expected in November. An Anthem spokesman has not yet responded to a request for comment from the Huffington Post.
Here's the video from Brave New Films: