Anthem push to go for-profit raises ire New pledge of corporate responsibility sought

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Consumer advocacy groups want health giant Anthem Insurance Cos. of Indiana to take a new pledge of “corporate responsibility,” and to be forced to answer questions in more states about its intention to become a purely for-profit company.

The demands from 32 groups in eight states, including Maine’s Consumers for Affordable Health Care, go beyond what the company is legally required to do. In Maine, Anthem is the dominant private health insurer with about 425,000 customers.

“We call on Anthem to do more than meet the minimums set by various regulatory authorities,” the groups’ letters to the company state. “Anthem must set a higher standard, one that positively uses the leadership role that its market power provides and truly reflects the Blue Cross and Blue Shield tradition.”

Besides Maine, the states involved are Kentucky, Connecticut, New Hampshire, Ohio, Nevada, Colorado and Indiana. A wide range of groups is involved, including Catholic Charities from Colorado, the Colorado AFL-CIO, Homeless and Housing Coalition of Kentucky, Kansas State Nurses Association, Kentucky Psychiatric Association, New Hampshire Citizens Alliance and Universal Health Care Network of Ohio.

The proposed corporate responsibility pledge would have Anthem commit to a variety of broad goals, such as maintaining adequate provider networks, offering products that benefit vulnerable populations, submitting to additional public scrutiny before changes in health policy benefits, and maintaining employment levels.

An Anthem spokeswoman said Wednesday the company has made many pledges and is living up to them.

“We feel we operate as a socially and community-responsible company,” said Lauren Green-Caldwell, who hadn’t seen the consumer groups’ demands.

Green-Caldwell said the company had pledged to do business in the best way for its customers. “We have been a good corporate citizen,” she said.

To the call for more public hearings outside Indiana on the companies’ intention to become a purely for-profit entity, Green-Caldwell said the hearing scheduled for next Tuesday in Indianapolis is the appropriate forum.

Consumer groups have been criticizing Anthem since it first proposed purchasing Blue Cross and Blue Shield of Maine in 1999. Blues officials said the sale was necessary to gain access to needed capital.

Most major consumer and medical groups in Maine resisted the sale of the state’s last nonprofit insurer, saying Anthem was paying too little and that the Blues had other options to stay nonprofit.

During the debate, Anthem officials said the Indiana company was really a nonprofit because it was a mutual insurance company. Such a company is owned and run for its policyholders.

But critics predicted the company would one day move to change to a stock-owned company, whose masters would be on Wall Street.

Despite the pitched local opposition, lawmakers opted against intervening, and Superintendent of Insurance Alessandro Iuppa approved the sale with many conditions he said would protect policyholders.

In February, nine months after acquiring the Blues, Anthem announced its plan to become a stock-owned company. Because it is based in Indiana, that state’s insurance commissioner has called a public hearing for next month.

Now, Consumers for Affordable Health Care’s Joe Ditre is asking Iuppa to hold a public hearing in Maine on the demutualization move. That change is huge because the company will be making decisions to please stockholders, he said.

The Maine Medical Association might have signed on to the request for a public hearing had it been asked, said Gordon Smith, executive vice president. He also agreed Wednesday that “because they were traditional Blue Cross Blue Shield plans, we take a different view of them.”

Whether public hearings would be legally possible drew different opinions from two of the consumer groups that signed the letters.

Dawn Touzin, of Community Catalyst, a national advocacy group in Boston, said state insurance commissioners have discretionary authority to call such a hearing.

Ditre said he did not know if Iuppa could call a hearing or not.

“I certainly don’t have the ability to pre-empt federal law,” Iuppa said. “I can’t put conditions on that [demutualization].”

Iuppa said that federal laws had been changed in such a way since the sale of the Maine Blues to eliminate any authority he might have had. Now, that process will be governed by the home state of the holding company in Indiana.

But Maine still has input, he said. He already has forwarded a letter to the superintendent in Indiana containing details of the conditions imposed on the Blues of Maine sale to Anthem and other pertinent issues, he said.

Iuppa said some of the features of the broad pledge demanded by consumer groups seem contradictory.

For instance, in Maine there are many individual requirements on insurers that make doing business in the state more expensive, he said. These requirements, some of which he tried unsuccessfully to have the Legislature weaken last session, stifle innovative product design.

Such innovative design, with higher deductibles or other options, could help to achieve one of the pledge points to have Anthem offer “products that would benefit more vulnerable populations.”

Consumers for Affordable Health Care opposed such reforms, and lawmakers defeated them handily.

The bottom line for Iuppa is that “the consumer groups would like to have rich benefit packages that would be paid for by the government.”