Anthem Health Plans of Maine, Inc. v. Superintendent of Insurance
2012 ME 21
| Me. | 2012Background
- Anthem appeals a superior court judgment affirming a Maine Superintendent of Insurance rate decision for July 1, 2011–June 30, 2012.
- 24-A M.R.S. § 2736 requires rates for individual health plans to be not excessive, inadequate, or unfairly discriminatory; the Superintendent balances these concerns.
- Anthem sought a 9.7% (later 9.2%) average rate increase with built-in risk/profit margins; revisions lowered the request and adjusted margins.
- The Superintendent held five public hearings and issued a May 12, 2011 decision deeming 9.2% with a 3% margin excessive but not inadequate, balancing investor and consumer interests.
- A May 18, 2011 order implemented a 5.2% average rate increase with a 1% built-in risk/profit margin.
- Anthem petitioned for judicial review; the trial court affirmed, and the appeal proceeds to determine if the rate is lawful under the statutory scheme.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Meaning of not inadequate under 2736(2) and profits | Anthem argues inadequate requires a guaranteed 3% profit margin. | Superintendent may balance financial integrity with public interests and need not guarantee profit. | Not inadequate allowed; profits not mandated by statute; 5.2% with 1% margin consistent. |
| Standard of review | Anthem seeks strict scrutiny of the Superintendent's interpretation. | Court gives deference; review for abuse of discretion and reasonableness. | Court adopts abuse-of-discretion/reasonableness standard with deference to the Superintendent. |
| Cross-subsidization and confiscatory taking | Rate incongruity could cross-subsidize regulated lines and confiscate property. | No proven cross-subsidization or taking under the approved rates. | No cross-subsidization proven; no confiscatory taking. |
Key Cases Cited
- Calfarm Ins. Co. v. Deukmejian, 48 Cal.3d 805 (Cal. 1989) (solvency concerns not per se confiscation; comparative rate framework)
- Duquesne Light Co. v. Barasch, 488 U.S. 299 (Supreme Ct. 1989) (outcome hinges on total rate reasonableness, not method)
- Anthem Health Plans of Me., Inc. v. Superintendent of Ins., 2011 ME 48 (Me. 2011) (ambiguous not inadequate standard; deference to agency interpretation)
- Nat’l Council on Comp. Ins. v. Superintendent of Ins., 481 A.2d 775 (Me. 1984) (confiscatory taking framework in insurance ratemaking)
- Mass. Bonding & Ins. Co. v. Comm’r of Ins., 329 Mass. 265 (Mass. 1952) (premiums must consider consumer welfare and competitiveness)