ABC anchor Diane Sawyer, who in February demanded to know who will “keep insurance companies from jacking up premiums while making huge profits?”, on Friday found her champion in the Superintendent of Maine’s Bureau of Insurance, hailing Mila Kofman as a “super-cop” and a “gladiator” for rejecting a rate hike requested by Anthem Blue Cross.
Kofman proclaimed “we are the super-cops on the street. I take that responsibility as an insurance regulator very seriously,” a self-promotional description Sawyer adopted in her introduction, touting “a woman in Maine who is acting as a super-cop, and telling the insurance companies ‘no.’”
Reporter Bill Weir recounted how Kofman turned down an 18 percent increase in premiums for individual policies, allowing “11 percent. Enough for Anthem to cover their rising costs, but not enough to make a profit. She says they're doing just fine.” Presuming nefarious motives by insurance companies, Weir asserted the new health care law “depends on state regulators to keep them honest every day.”
Not until the very end of his one-sided story, which trumpeted how Kofman is “fighting” for Mainer’s “lifeline” and featured a liberal “consumer” advocate, did Weir get around to how the law in Maine forces “insure companies to cover anybody who applies, regardless of their health, but they don't have a mandate that everybody buys in. So there's not enough young people to carry the costs of those who need care.”
The damage from regulations are even worse than that. As noted in a March 6 Maine Sunday Telegram article, the law mandates the same rates, regardless of risk, and has driven out of Maine all but two comapnies willing to sell policies to individuals:
A 1993 Maine law made it almost impossible for insurance companies to turn down customers or drop them because they are sick. And it said that all customers also must be charged roughly the same rates, regardless of risk.
Gradually, nearly all of the smaller insurance companies stopped selling coverage in Maine and focused on other markets. Today, one other private insurer, MEGA Life and Health Insurance Co., offers individual insurance...
And some individual policy holders are getting a lot of expensive care. Four percent of Anthem's individual subscribers account for 80 percent of the dollars paid out in claims, according to company officials.
The rising costs, and the fact that healthy people have to pay the same premiums as sick people, has led many to simply stop paying premiums. The number of Anthem's individual subscribers has dropped from 30,000 to about 20,000 in the past decade.
And, because there is now a higher proportion of sick people in the policy pool, premiums have to go up faster than costs, said Daniel Corcoran, president of Anthem in Maine.
Kofman, an associate research professor at Georgetown's Health Policy Institute, is a vetean of the Clinton administration where she spent four years, 1997-2001, at the Department of Labor working on state and federal health care initiatives. From her official bio:
In 2000, she was appointed Special Assistant to the Senior Health Care Advisor to the President at the White House to work on legislative and regulatory initiatives -- the Patient’s Bill of Rights, long-term care insurance, nursing home reform, and ERISA reform. In 2000, she was honored with the Labor Secretary’s Exceptional Achievement Award.
Sawyer’s recent targeting of health insurance companies:
February 23: “Sawyer Pleads: Who Will 'Keep Insurance Companies from Jacking Up Premiums While Making Huge Profits?'”
February 24: “ABC Pushes Obama's Insurance Demonization”
The story on the Friday, April 2 World News on ABC:
DIANE SAWYER: There is a showdown taking place back here tonight between insurance companies trying to raise premiums on hard-hit policy holders, and some state officials who are determined to stop them. Bill Weir introduces us to a woman in Maine who is acting as a super-cop, and telling the insurance companies “no.”
BILL WEIR: [audio cut out] Maine, one of 29 states with the power to control the price of health insurance. But very few of those state regulators actually use their power.
ROBERT HUNTER, DIRECTOR OF INSURANCE, CONSUMER FEDERATION OF AMERICA: Historically, it's been 50 percent that came from the insurance companies and 50 percent go back to the insurance companies, so they're not going to be too tough on it.
WEIR: But Mila Kofman is different. With no ties to insurance, she was a professor who specialized in consumer protection.
MILA KOFMAN, SUPERINDENT OF INSURANCE, MAINE: We are the super-cops on the street. I take that responsibility as an insurance regulator very seriously.
WEIR: Her biggest battle is with Anthem Blue Cross and Blue Shield, which made a $33 million profit in Maine last year, but lost $2.3 million covering individuals who don't get coverage at work. The company asked to raise the premiums on those people by more than 18 percent. They want to raise it even more this year. But after running their numbers, Kofman said no. Limited the increase to just under 11 percent. Enough for Anthem to cover their rising costs, but not enough to make a profit. She says they're doing just fine. So, Anthem sued. And when a Portland judge brings his verdict next week, a lot of people will be watching, because while President Obama's new law requires insurance companies to publicly defend their price hikes, it depends on state regulators to keep them honest every day.
HUNTER: They’re going to have to really beef up both their laws and staffs so that they have the horses to actually regulate well.
KOFMAN: You have to give companies an opportunity to succeed in the private market, and you have to protect consumers who rely on that private market. For some, it's their lifeline to getting medical care.
WEIR: And she'll keep fighting for that lifeline. She just was sworn in for a new term today. As for Anthem of Maine, they sent us a long statement pointing to the laws in Maine, Diane. Since the mid-90s, they forced insure companies to cover anybody who applies, regardless of their health but they don't have a mandate that everybody buys in. So there's not enough young people to carry the costs of those who need care. But the system is so broken up there, about 40 percent of the families affected by these rate increases have a $30,000 deductible.
WEIR: Already. So they don't really even see anything that doesn't come out of their own pockets unless it’s catastrophic.
SAWYER: Thanks, Bill. She doesn't look like a gladiator, but everybody is watching her and the results of this case.
Online version: “Maine Regulator Gets Tough in Health Care Battleground; Mila Kofman of Maine Sees Herself as 'Super Cop' Policing the Price of Health Insurance”