Maine GOP Misleads on Insurance Rate Hikes

Yesterday, Maine Citizens for Clean Elections (MCCE) released a report on campaign spending by the insurance industry and their successful advocacy for LD 1333, now known as Public Law 90 or the rate hike bill. I wrote a column on it for the Kennebec Journal and Morning Sentinel.

Especially damaging is a graph contained in the report showing a shift in contributions by Anthem in 2010, from supporting both parties to putting all their money behind Republicans.

The Maine Republican Party responded with a press release last night accusing MCCE of being a “leftist organization,” a label they now apparently apply to anyone more progressive than Genghis Khan. They also included their own graphs, perhaps in an attempt to blunt the effect of MCCE’s chart.

Unfortunately for the GOP, the graphs they sent, which are meant to show the average rate increases by Anthem in the small group and individual markets, aren’t accurate and aren’t at all useful for determining the effect of their insurance industry deregulation.

First of all, a comparison between past years and 2012 is between apples and oranges. The averages used to be much closer to a real measurement of how people’s premiums would change, but now that insurers can discriminate so much more based on people’s age and geographic location, an average doesn’t mean much.

In addition, these graphs don’t take into account the huge new subsidy paid to the insurance companies by Maine taxpayers. As the Sun Journal and Bangor Daily News have reported, without the new $4 a month tax, Anthem’s rates would have gone up in the individual market by 21%.

“But advocates for the law say the new reinsurance pools are the reason Anthem, one of the state’s largest health insurance providers, asked for an average rate increase of only 1.7 percent this year.

According to a statement on the Bureau of Insurance’s website, that represents $11 million in savings for Anthem because of the anticipated ability to use the MGARA funds to pay down high-risk claims.

Without the new nonprofit and the reinsurance pool, the company would have asked for a 21 percent increase, according to officials and documents filed with the bureau.”

So here’s how the graph looks if you just look at the actual policy changes in the rate hike bill:

For the small group market, we have the same problem of the average having almost nothing to do with people’s rates anymore – young people in Portland may get a decrease of a few percent, while a business in The County may see their rates increase by 90%.

On their graph, the Republicans have a bar for 2012 at somewhere around 11%. This is just plain wrong. Even the average reported by Anthem in their latest small group filing to the Maine Bureau of Insurance puts that number at 14% so far. In the same filing this month, Anthem revealed publicly for what I believe is the first time that some small businesses have experienced a rate hike of more than 125%.

It should also be noted that when Republicans were pushing the bill they claimed there would be no increases at all, even for older Mainers and those in rural areas.

Here’s a more accurate small group graph:

The most interesting thing about this release for me, however, isn’t that the information is misleading. It’s that it isn’t sourced.

The Republican Party didn’t get these numbers from the media, which hasn’t yet had any coverage of Anthem’s average group rate increase. They also didn’t get them from the Bureau, which has the different numbers above.

That leaves only one place I can think of where they could have got them. How hilarious would it be if the Maine GOP sent out a release in which they claim not to be a tool of the insurance industry that was written in part by Anthem Insurance? I hope a reporter follows up on this and asks them where they got their graphs.

Mike Tipping

About Mike Tipping

Mike writes about Maine politics and policy with a focus on analysis and explanation. He works at the Maine People's Alliance and Maine People's Resource Center, writes a political column for the Portland Press Herald