By Tom Curry National affairs writer
msnbc.com
updated 1/12/2010 11:27:22 AM ET 2010-01-12T16:27:22

Claim: The cost of individual insurance in some states is increasing far faster than medical inflation.

Anthem Blue Cross Blue Shield of Maine, the only major carrier still serving the individual market in that state, has asked state regulators to approve a 22.9 percent rate increase. Regulators limited the premium 2009 increase to 10.9 percent. "Asking for a 23 percent rate increase for individual insurance rates in the middle of a recession is outrageous and is an example of why we need to pass comprehensive health care reform," protested Rep. Chellie Pingree, D- Maine. Last week the Centers for Medicare and Medicaid Services reported that medical spending in the United States in 2008 increased by 4.4 percent, after a 6 percent increase in 2007. Why are costs for individual insurance increasing so much faster than the cost of the medical procedures for which the insurance pays?

Fact or fiction?
Fact. Although there have been premium increases for individual insurance in other states, Maine has an older and a lower-income population than the nation as a whole — factors that drive up insurance costs. Maine also has "guaranteed issue" — no person, even one with an illness that extremely costly to treat, can be denied insurance due to a medical condition. And it has "community rating," which means an insurer must charge all people covered by the same type of policy the same premium without regard to age or other factors. Anthem spokesman Christopher Dugan said, "The combination of guaranteed issue and community rating has caused the pool to shrink year over year and has created an environment in which healthier people drop their coverage as premiums rise, leaving behind an increasingly smaller and less healthy group of people" whose premiums increase at a faster rate.

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