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Kaiser Health News: Maine Court Okays Health Plan Profit Caps

Kaiser Health News reports here:

“In a case closely watched by the insurance industry, Maine’s top court Tuesday upheld state regulators’ authority to hold down rate increases sought by Anthem Health Plans of Maine.

In its ruling, the Supreme Judicial Court said that Maine’s insurance superintendent had “properly balanced the competing interests” in arriving at an approved rate increase of 5.2 percent. The insurer, a unit of Wellpoint, the nation’s largest insurer, had sought a 3 percent profit margin as part of an overall 9.2 percent increase in health insurance rates for policies sold to individuals in 2011. It argued that state regulators’ decision to grant a 1 percent profit margin violated state law and the U.S. Constitution by depriving the company of a “fair and reasonable return.”

Wellpoint spokeswoman Kristin Binns said in an e-mail statement that the company had not decided on its next step. ”We stand by our position that filed rates need to both cover the medical costs for our members and allow for an adequate risk margin to cover unanticipated costs,” she said.

Legal experts say the company has several options, including asking the state court to reconsider its decision, or seeking to appeal the ruling to the U.S. Supreme Court.”

Read the full report on Kaiser Health News here.