Anthem Blue Cross and Blue Shield (a subsidiary of WellPoint) wanted the State of Maine to approve an average rate hike of 18.5 percent on its policyholders.
The State of Maine said "No, we don't think so."
So the insurance companies are now suing the state.
Anthem Blue Cross and Blue Shield say they need the rate increase to ensure a 3 percent profit margin.
As you might suspect, there are some who disagree with that argument:
The Maine Attorney General's office seems to agree with the above sentiment:
"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."
In response to the suit, the AG's office pointed out that Anthem has made $5.4 million from individual consumers over the past two years.
The AG also points out that Anthem paid $75.7 million in dividends to WellPoint in 2008.
This is an 87% increase from the $40.4 million Anthem Blue Cross and Blue Shield paid WellPoint in 2007.
And a 112% increase over the the $35.6 million Anthem paid WellPoint in 2006.
I'd say that's hardly a low-profit operation.
The AG went on to note how well Anthem paid it's executives:
"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."
Yeah. Anthem is barely squeaking by, the poor bastards.
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