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Anthem Rate Hike Denied

by | Dec 3, 2010 5:00pm
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Posted to: Health Care

Hugh McQuaid photo

State Healthcare Advocate Kevin Lembo and Attorney General Richard Blumenthal discuss “historic” rate denial

(Updated 5:56 p.m.) Acting Insurance Commissioner Barbara Spear denied Anthem’s request for a 20 percent rate hike late Friday afternoon, calling the request “excessive.”

Click here   to read the denial.

At a press conference Friday, Attorney General Richard Blumenthal called the flat denial of the proposed rate hike a historic first in recent years. He was also happy with the timing and called it a holiday gift for Connecticut families struggling with a stalled economy.

“This is truly a victory,” Blumenthal said of the denial. “It’s a resounding win for working families.”

He lauded Spear for “tossing the rubber stamp” of approval out the door and striking down the rate increase, which he said would have been a job-killer for the state’s small businesses.

The Insurance Department has a history of approving rate increases, according to a 2009 Office of Legislative Research report. After the last 47 percent increase this October then Insurance Commissioner Thomas Sullivan resigned following public outcry over the increase given to Anthem.

One message Blumenthal took from the decision was that it was evidence that public hearings, like the one conducted on Nov. 17, really do work.

Blumenthal said his staff was exploring the option of undoing previous Anthem rate hikes which went in to effect without public hearings, but he pointed out that there is no legal precedent for such an action.

“We’re talking about the most recent Anthem increases of 20 to 50 percent where there was no public hearing . . . They actually produce more consumer friendly scrutiny.”

Blumenthal thanked Healthcare Advocate and Comptroller-elect Kevin Lembo for his aggressive partnership in fighting rate hikes.

Lembo said Anthem never provided adequate evidence that a rate increase was justified, and he thought that the request was probably profit driven.

“Why would a company that’s there to make a profit not come back and ask for more if they’re pretty sure they’re going to get more?” he asked. “It’s where profit making and health care meet, and that’s not always a good relationship.”

Lembo also credited Spears for changing the direction of the Insurance Department and said he hopes to see more scrutiny of future rate increase requests.

“There are good people there ready to do good work with the right leadership,” he said of the department.

The Connecticut State Medical Society praised both Blumenthal and Lembo for their work on the issue. The society is the state’s largest organization of doctors and had applied for and was denied intervener status for the public hearing.

“This goes to show that public testimony in a transparent process works,” the group’s executive vice president, Matthew Katz, said in a statement.

Soon after the announcement, U.S. Rep. Joe Courtney also released a statement praising the decision.

“Much like the rate increase Anthem requested and was granted in October, this request was exorbitant and unjustifiable,” Courtney said.

Sarah Yeager, an Anthem spokeswoman, said the company is in the process of reviewing the decision but reiterated the provider’s assertion that rising health care costs drove the request.

“The increasing demand for medical services, including the use of new, expensive prescription drugs, and demand for advanced technologies, are driving up the cost of health care at an unprecedented rate,” she said in a prepared statement.

Protesters and Anthem policyholders rallied against the rate increase at the Nov. 17 public hearing.

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