Maine People’s Alliance recommends that the Superintendent of Insurance deny the above-captioned application, based on our participation in public hearings and evidentiary hearings conducted by the Bureau of Insurance.

We focus our opposition to the conversion and sale of BCBSME on the serious negative effects the transaction will have on citizens of Maine. We believe that evidence submitted at the evidentiary hearings (April 3-7,2000) supports our opposition. Testimony at the public hearing (April 8, 2000) further confirms the validity of our position.

Throughout their testimony, Anthem officials declined to discuss concrete plans for the future, after the purchase agreement is executed. They expressed their intentions, but consistently declined to make commitments. In addition, their descriptions of the company’s behavior following previous acquisitions indicate that their policies, while locally implemented, would depend on the approval of the parent. The parent company would also determine the level of resources to be made available to the local entity and would determine the degree to which local management would control policies. While the Superintendent of Insurance would have oversight authority, it is clear that the company’s primary obligation would be to its owners and not to either the policyholders or the people of Maine. As a result, we believe that this transaction fails to meet several of the standards of review.

With respect to Standards 4, 10 & 24, the proposed plans are unfair to policyholders or enrollees in the BCBSME system. Many consumers have preferred BCBSME health insurance because they have faith the Blue Cross "brand" and especially in its non-profit status. Now, they find that without any consultation or even notice prior to the purchase agreement, a portion of their premiums will be going to a for-profit company whose corporate goals are very different from those of a non-profit. Maine people will not get what they paid for, without having any voice in the decision-making process.

The absence of commitment beyond the actual day of transfer allow for the possibility that Anthem Health Plan will not have the ability or tendency to render service to their policyholders, enrollees or the public, as required in Standard 8. After the closing, we have no guarantee that provider networks will be maintained on a state-wide basis, that BCBSME medical policies will continue in effect, that individual policies be offered, or that high-risk individuals will be able to obtain health insurance. There is certainly the possibility that an exclusionary policy regarding newly approved pharmaceuticals will take effect. The parent company will have the ultimate authority over the Anthem Health Plan: we have no assurance that resources will actually be provided or that the need to profit will allow for service to Maine consumers to be maintained.

Others will argue that the valuation of BCBSME is too low or that the company will not be revalued as of the date of transfer, especially in view of the recent changes in the market. Some will question whether other options were sought, and especially whether attempts were made to maintain the non-profit status of BCBSME. Since MPA is a membership organization, we have concentrated our attention on issues which would affect the lives as well as the pocketbooks of Maine citizens. It is obvious that health and well-being of citizens are major elements in the status of any human society. Witnesses testified to those effects at the public hearing on April 8, 2000. MPA staff has reported that as information about the sale has become public during the evidentiary hearings, our members have frequently expressed emotional concerns regarding probably changes in BCBSME coverage and costs. Unfortunately, it was not possible to present witnesses to these negative effects within the time constraints of the evidentiary hearings themselves. We do believe that these emotional effects should present you with a serious issue regarding the sale.

Finally, we have concerns about the expectation expressed in Standard 5 that management of BCBSME will transition to Anthem Health Plan management positions, at least at the time of closing. The BCBS management team has been responsible for the organization’s functioning during its recent financial problems. While we might wonder whether it is likely that they would continue beyond the transfer, in view of Anthem’s reluctance to make commitments beyond the closing date, their ability to make the changes necessary to improve the company’s profitability is in question.

In summary, MPA recommends that the Superintendent not approve the conversion and sale of BCBSME. The transaction is neither fair to Maine people in general, not to policyholders and enrollees specifically. It will cause them considerable emotional stress as well because of the changes that they expect and fear.

Dated: April 13, 2000

Respectfully submitted,

Jane Scease

Co Chair

Maine People’s Alliance