Monday, October 31st, 2011 - 12:17
Monday, October 31, 2011 - 12:04
A lawsuit filed in Maine seeks to counteract the state's ability to hold down insurance rate increases. The outcome could have wide ramifications for a key enforcement mechanism in health reform.
A lawsuit filed in Maine by a unit of WellPoint argues that state regulators violated the law when they held down proposed insurance rate increases, according to a report (http://www.kaiserhealthnews.org/Stories/2011/October/31/WellPoint-Fights...) from Kaiser Health News. WellPoint argues that regulators should not be allowed to force insurance companies to have rates low enough that the companies have to take a loss on that section of their business.Anthem, the WellPoint unit and the largest seller of individual insurance in Maine, says it is having to spread the costs of the plans outside of Maine because it will not be able to earn enough money in the state to support the individual policies. Maine regulators argue the company is financially strong and won't be harmed by a reduced profit margin.The health reform law requires states to review rate increases of 10 percent of more. The federal government will step in to help those states with inadequate review capabilities, but it cannot reject rate increases.Many states, however, are in the process of boosting their laws and capabilities to review, and in some cases reject, rate increases. Much of the help in augmenting state regulatory regimes is coming in the form of assistance from the federal government.Should Anthem win the lawsuit in Maine, it would likely have a dampening effect on enforcement measures in other states. Should Anthem lose, state regulators will likely feel emboldened about their enforcement measures.
