DirigoChoice draws interest as Anthem proposes rate hike

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Interest in Maine’s state-subsidized DirigoChoice health insurance plan is growing steadily with about 1,500 applications requested by small businesses since Oct. 4. That’s the date Anthem Blue Cross and Blue Shield of Maine, the investor-owned company that contracted with the state to administer the program, started taking applications.

As of Oct. 8, Anthem spokesman Bill Cohen said a total of about 35 completed applications had been returned, although he didn’t know how many employees would be covered.

Among the first to sign up was David White, owner of a car repair shop on Mount Desert Island. White said Thursday he’ll save about $5,500 a year insuring his handful of employees through Dirigo instead of the Anthem small business plan he’s currently enrolled in.

“Now I’ll be able to give my men the raises they’ve deserved for the past four years,” he said.

But in the same month that Anthem is rolling out the state’s innovative program meant to provide affordable coverage to uninsured Mainers and the small businesses they work for, the company has proposed a significant increase in its own privately offered HealthChoice group of plans.

HealthChoice is not subsidized by the state and provides coverage to sole proprietors, individuals and families that are not part of an employer group.

Anthem has also requested an increase of 5.8 percent to its Medicare Part B Companion Plan, which pays for doctor visits and other primary care services for senior citizens.

Cohen said Thursday that calls about DirigoChoice have been steady, with a total of about 1,800 inquiries so far fielded by the company’s South Portland office and independent agents around the state. The first few days of enrollment, the company phones were swamped, he said.

Some callers were frustrated by being put on hold for a long time, not having their calls returned or not being able to leave a message because voice mail boxes were full. But Cohen said Thursday that the calls have evened out and are now being handled smoothly.

DirigoChoice pays for a wide range of services and provides 100 percent coverage for preventive care such as annual physicals, childhood immunizations, mammograms and other routine wellness services. Out-of-pocket spending for other services varies according to income, as does the enrollees’ share of the monthly premium.

The state provides premium subsidies for lower-income enrollees. Employers must pay 60 percent of their worker’s monthly premium.

Business owner White, an active participant in developing the various Dirigo initiatives in Augusta, said he was “disappointed in the overall cost – it’s not as juicy a deal as we hoped it would be.”

Still, he said, the product provides considerable savings for the comprehensive set of benefits he wants to offer his employees.

A DirigoHealth family policy starts with a base premium of about $900 per month, but is subject to a variety of decreases, up to 100 percent, depending on family income.

Anthem was the only company to bid on the DirigoChoice contract when the Governor’s Office of Health Policy and Finance issued a request in May of this year.

The for-profit company has been criticized by consumers and health care advocates in Maine since taking over the state’s previously non-profit Blue Cross and Blue Shield programs in 1999.

Under Anthem, insurance premiums have risen steeply, pricing coverage out of the reach of many Mainers and the companies that employ them.

The contrast between the growing ranks of the uninsured and Anthem’s healthy corporate earnings report has rankled many consumers, advocates and health officials in Maine.

Indiana-based Anthem announced in June a 34 percent jump in company-wide second-quarter profits over the same period in 2003, and recently provided multimillion dollar bonuses to top executives.

Earlier this month, Anthem requested a rate hike affecting enrollees in its HealthChoice products, which insure about 35,000 Mainers who are not part of an employer group.

Cohen said the proposed change would affect different plans within HealthChoice differently, from a premium decrease of 4.2 percent to an increase of 106.5 percent. The average would be an increase of 14.7 percent, he said. Cohen pointed out that there had been no increase in HealthChoice premiums for two years.

The company has also requested an increase of 5.8 percent on its Medicare Companion Plan, which pays for doctors’ visits and other primary care services for Mainers 65 and older.

Cohen said the requests are based on projected increases in prices charged by hospitals and health care providers in the coming year. It also factors in the likelihood that HealthChoice enrollees will use more services as they age, he said.

Cohen said it’s important to recognize the “disconnect” between the cost of insurance premiums here in Maine and the corporate profits of the company that does business in nine states.

State regulations require Anthem to spend 85 cents of every dollar on health care to its customers, he said, with administrative costs and all other operating expenses coming out of the remaining 15 cents.

Maine’s Blue Cross and Blue Shield business was in such poor shape when Anthem took it over in 1999, Cohen said, it has taken millions to bring operations up to date.

“It is because of the strong profit that we can make improvements to the system,” he said.

Such explanations are cold comfort to Susi and Tod Foster of Bar Harbor. Sole proprietors of the Bar Harbor Brewing Company, the couple has been paying Anthem about $460 dollars a month for insurance for themselves and their daughter. Their HealthChoice policy carries a $5,000 annual deductible and doesn’t pay at all for preventive care.

If Anthem’s request is approved, the Fosters’ premium will increase to over $500 a month, Susi Foster said. After Anthem’s reported earnings and millions of dollars in bonuses awarded earlier this year to senior executives, “How can they even think of raising rates?” she wondered. “In my mind, it’s almost criminal.”

Foster said the family can’t take the risk of dropping coverage altogether, but may look at DirigoChoice as an alternative. Although the state’s plan may cost her family more, she said, the benefits would be better.

The state’s insurance superintendent, Alessandro Iuppa, is charged with deciding whether Anthem’s requested increases are “excessive, inadequate or unfairly discriminatory” or if they should be allowed.

Iuppa, who was appointed by former governor Angus King and approved the sale of Maine’s Blue Cross and Blue Shield programs to Anthem, is prohibited by state regulations from speaking with media about the proposed rate hikes.

A public hearing on the HealthChoice rate increase proposal will be held at 9 a.m. Nov. 12 at the Cross Office Building in Augusta.

A hearing on the proposed Medicare Companion increase is scheduled at 1 p.m. on Thursday, Nov. 4, at the Bureau of Insurance annex in Gardiner.

For more information on the hearings, call the Bureau of Insurance at (800) 300-5000 or visit the Web site: www.maineinsurancereg.org and click on “hearings schedule.”

More information on DirigoChoice coverage is available at www.dirigohealth.maine.gov.