Maine Health’s Anthem Troubles Have Deep Roots

This probably won't happen; these shots across the bow are common, as both entities maneuver for advantage.

Maine Health claims $13 million in underpayments, by its lights, and $70 million in non-payments from Anthem, which controls 11% of the national market. It's also Maine's largest insurer, and Blue Cross franchisee.

The real news, however, came from small providers, who chimed in about the difficulties they have in collecting from Anthem, often waiting months for a response, with claims rejected for seemingly trivial reasons.

Anyone who's studied American health care economics can attest that prices are often fictional – take the "retail" rate for most prescription drugs. But it still matters who pays, and how much, and the usual answer is "too much."

Anthem is a highly profitable company, with $6 billion in net income for 2021. Its presence here dates to 2000, when it acquired the ailing Maine Blue Cross-Blue Shield, the state's largest health insurer – and non-profit, as most Blue Cross plans were then.

Anthem started in 1946 as an Indiana mutual insurance company. After the failure of Bill Clinton's managed care plan in Congress in 1994, Anthem saw the opportunity to offer "private managed care" on a corporate scale.

It snapped up Blue Cross plans and made them for-profit, eventually going public and trading on Wall Street. It started in Ohio, then moved to New England, acquiring plans in Connecticut, New Hampshire and Maine.

Anthem decided what Maine Blue Cross's problem was: insufficient rates. Not only did the company seek far larger increases than the non-profit had, but it rapidly built up reserves – also allowed under Maine law – well beyond claims it paid.

One begins to see how Anthem became a "cash cow," a reliably profitable stock beloved of investors.

Among the many problems with giant national health insurers is that they're subject only to state regulation, with minimal federal rules – a mismatch that's easily exploited.

One egregious example came in Maine, where Anthem was largely responsible for wrecking the Dirigo "public option" insurance plan instituted by the Baldacci administration in 2003.

Even as Anthem became sole provider of Dirigo policies, it repeatedly sued the state about the plan's financing through a surcharge on all private policies, reflecting the system's documented savings.

Anthem lost every round, legally. Yet Gov. Baldacci, unaccountably, then scrapped the "savings offset" payment and replaced it with "sin taxes" on food and alcohol, instantly becoming known as the "Dirigo taxes."

Not surprisingly, a tax increase for no discernible reason had few defenders. It was repealed in a Republican-backed 2009 referendum, foreshadowing the 2010 GOP sweep.

In 2011, Gov. Paul LePage signed legislation scrapping Dirigo, and another non-profit – this one fully public – bit the dust.

It's not that there's something magic about non-profit health care; hospitals are, on paper, mostly non-profit, but most resemble corporate businesses in their practices and their eagerness to merge.

But there's little question that no longer having a Maine-centered health insurer has cost the state dearly. In Anthem's universe, Maine isn't even pocket change.

Federal reform is the only answer, and the odds are long there, too, with the growing influence of corporate health care, with limitless campaign spending, courtesy of the U.S. Supreme Court.

Yet it has to be done. A public system not controlled by the public will never serve any state's long-term interests; it's unfortunate we couldn't see that back when it would have made a difference.

Douglas Rooks welcomes comment at drooks@tds.net.

Douglas Rooks

Columnist