Hugh McQuaid photo

Protesters used a bit of civil disobedience to make their point at the Insurance Department’s public hearing on Anthem Blue Cross Blue Shield’s proposed 20 percent rate hike, which went forward Wednesday morning despite calls from Gov.-elect Dan Malloy to reject the proposal and Attorney General Richard Blumenthal’s request that the hearing be delayed.

—More photos

Protesters delayed the hearing for almost 20 minutes when Anthem representatives got a chance to justify the rate hikes. While Anthem’s Robert Ruiz-Moss spoke, about a dozen people stood and unfolded signs which collectively spelled, “Anthem Profits $4,750,000.” Other signage included the word “SHAME” and he phrase :CT Rates increased 96% 2000-2009.”

The signs brought the hearing, which already was running behind schedule, to a halt when hearing officer Mark Franklin insisted that the protesters leave and they remained standing silently. During a subsequent recess, reporters repeatedly were asked to remain seated.

Eventually, proceedings resumed after the protesters agreed to stand silently in the back of the room. As a result, the insurance company’s representatives sat before an unhappy crowd.

Before the disturbance, the first part of the hearing was an opportunity for members of the public and elected officials to speak about the premium increase, which they did, almost universally condemning it. The word “unconscionable” was used several times but “disgusting” and “despicable” also were invoked.

Larry Deutsch, a physician and member of the Hartford City Council, was the first to speak. He urged the Insurance Department not to grant the premium increase and said the city should consider looking for an alternative to Anthem for employee policies.

When state Sen.Edith Prague spoke next, she seemed under the impression that the hearing was regarding a 47 percent increase in premiums, which was granted to Anthem earlier in the year by former Insurance Department Commissioner Thomas Sullivan. That increase, which was granted without a public hearing, was a move that ultimately led to his resignation. Informed that Wednesday’s hearing was regarding a separate increase, Prague shook her head.

“Another increase,” she asked. “Dear me. It’s really an eye-opener to have these rate hearings so the public knows what this company is all about. There was a time when Anthem was a respectable company that people were proud of. Today the corporate greed is inexcusable.”

Harvey Wooding, a small business owner from Redding, also testified, noting that he was offering public testimony for the first time. As an Anthem policy holder, Wooding said, his experiences with the company have left him “enraged.” 

Wooding said that he has watched his premium increase 23.6 percent for reasons no one at that company has been able to explain. He said that this year he has spent more than $20,000 on insurance for two people and used only $7,000 in health care—$5,000 of which he had to pay himself.

“I would say Anthem’s done pretty well on me,” he said, adding that he would consider switching to a different plan but he would “probably be out of business by then and it won’t matter.”

Blumenthal also made an appearance to assert his opinion that the hearing should have been postponed.

“We believe there is no justification. We believe there should be no rate increase,” he said. “The evidence fails to provide even a surface or preliminary basis for the rate increases.”

Other members of the public argued against Anthem’s stated justification for the rate hike. Jennifer Jaff, executive director of Advocacy for Patients with Chronic Illness Inc., noted that the company has said that its analysis indicated that claims costs are growing by 12.5 percent.

However, she pointed out that Anthem’s parent company, WellPoint, has reported better than expected earnings in 2010’s third quarter. She also quoted WellPoint’s chief financial director from the Wall Street Journal, saying, “People just aren’t using health-care like they have,” and “Utilization is lower than expected.”

“Thus, Anthem’s basis for the majority of the requested rate increase is directly contradicted by WellPoint,” Jaff said. “Anthem should be required to explain this obvious discrepancy.”

Jaff wasn’t the only one to draw comparisons between Anthem’s articulated need for premium increases and its parent company’s continued profits. Beverly Brakemen, a member of the Insurance Department’s consumer council and former director of Citizens for Economic Opportunity, expressed similar frustration.

“[Anthem was] allowed an increase of 22 percent in 2009 and then just this year 47 percent on an individual market product,” she said. “All the while in fact, Anthem Blue Cross has been so profitable that, since WellPoint acquired it in 2004, it has contributed more than $4.2 billion to the parent company’s bottom line.”

Anthem’s Ruiz-Moss said that WellPoint’s statements are not indicative of what is happening specifically in Connecticut, while Anthem’s latest proposal is tailored for the state. Anthem’s actuarial director, Jeanie Cassady, also said that the company’s products vary from state to state.

In a prepared statement, Anthem also defended its increases as typical of the industry: “The rate increases in the individual market — as required by actuarial analysis — are not unique to Anthem, but rather represent an economic reality faced throughout the entire industry. And it is important to note that Anthem’s increases are in-line with our competitors.”

Anthem also said that, given a law that prohibits health insurance company profits to exceed 80 percent of premium earned, extra money gained through the rate hike would have to be refunded to the policy holders.

“The key here is that, while we are proposing a 19.9 percent increase, if for some reason we are incorrect in our projection of future claims costs, and if we do not pay 80 percent of our medical costs out our premium next year, we will have to refund the money. We are not allowed to have profits in excess of the 4.5 percent calculated, that’s our absolute maximum,” Cassaday said. “Now on the other hand, if we are wrong and we end up having medical claims costs that are in excess of our 12.5 percent trend and our pool runs a loss ratio of 83 percent, we have to eat it. We can’t go back and try to correct or do things over. We’ve just cut our max profit and we can’t come back from it.”

A spokesperson for the Insurance Department said the record on the hearing, which lasted until after 4 p.m., remains open until Nov. 30. Since the department requested additional information from Anthem, the company has until that day to provide that information. The department hopes to have an order issued on the matter no later than 30 days after that date.