Document {$docnum} : Docket No. 99-14 : Hearing Decision : Bureau of Insurance

Harvey & Frank

Attorneys

R o b e r t S. F r a n k

November 4, 1999

Alessandro A. Iuppa, Superintendent of Insurance

c/o Lyndy Morgan

Docket No. INS-99-14

Maine Department of Professional and Financial Regulation

Bureau of Insurance

124 Northern Avenue

Gardiner, Maine 04345

Re: Anthem-Blue Cross Blue Shield of Maine (BCBSME) proceeding

Docket No. INS-99-14

Dear Mr. Superintendent:

Your office should have received for filing today the Comparative Premium Rate Analysis ("CPRA") prepared by Milliman & Robertson. The purpose of this letter is to comment on one assumption made in the CPRA.

In its CPRA, Milliman & Robertson assumed that the Maine premium tax would apply to Anthem BCBSME’s managed care business along with its insured indemnity business.

Under the Maine tax laws, insurance companies are subject to the insurance premium tax on insurance premiums and are not subject to the corporate income tax, but that managed care businesses are subject to the corporate income tax and are not subject to the insurance premium tax. The Company has not addressed the question of whether Anthem BCBSME’s managed care business will be subject to the Maine corporate income tax, the premium tax or neither. Rather, for the purposes of this CPRA, Milliman has adopted the conservative assumption that Anthem BCBSME’s managed care business, along with its insured indemnity business, will be subject to the premium tax (exclusive of FEP, which is a federal government program). Currently, BCBSME’s business is not subject to the premium tax.

Very truly yours,

STATE OF MAINE
DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION
BUREAU OF INSURANCE

In Re:

Application of Associated Hospital Service of Maine d/b/a Blue Cross and Blue Shield of Maine to convert to a Stock Insurer and Voluntarily Liquidate and Dissolve

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Certificate of Service

In Re:

Application of Anthem Health Plan of Maine, Inc. to Acquire the Assets of Associated Hospital Service of Maine d/b/a Blue Cross and Blue Shield of Maine and Related Transactions

Docket No. INS-99-14

(CONSOLIDATED)

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CERTIFICATE OF SERVICE

The under signed person hereby certifies that on November 4, 1999, he caused a copy of the following documents to be served by United States mail, first class postage prepaid, on each of the persons listed below.

James Zimpritch, Esq.

Judith Chamberlain, Esq.

Martin Robles, Esq.

William Laubenstein, Esq.

Gregory A. Brodek , Esq. (Maine Health Alliance)

Andrew B. MacLean, Esq. (Thomas D. Hayward, M.D., Maroulla S. Gleaton, M.D., and the Maine Medical Association)

Joseph P. Ditre, Esq. (Consumers for Affordable Health Care Foundation/Coalition)

Michele M. Gavin, Esq. (Central Maine Healthcare Corporation)

Robert I. Goldman (Maine Council of Senior Citizens)

Bonnie Post (Sacopee Valley Health Center, Regional Medical Center at Lubec, Eastport Health Care, Inc. and the Maine Ambulatory Care Coalition)

John Dieffenbacher-Krall (Maine People’s Alliance)

Filing Coversheet

Re: Anthem-Blue Cross Blue Shield of Maine (BCBSME) Proceeding

Docket No. INS-99-14

Submitting Party:	Blue Cross Blue Shield of Maine
Date Submitted	November 4, 1999
Title of Document:	Letter to Superintendent
Document Type:	Letter
Subject Index	Comparative Premium Rate Analysis
Number of Hard Copies Submitted	2
Number of Floppy Disks/CD’s Submitted	2
Confidential Information Submitted ?	No