The Marriage Equality Fight

While most politicos are looking at gubernatorial races in New Jersey and Virginia to determine whether Democrats gain maintain a short-term advantage in 2010, it's clearly the battles over marriage equality and gay rights in Washington state and Maine where the true potential of a progressive realignment can be measured. On the heels of the March for Equality, we're entering the final weeks of two ballot measures to gauge this support.

In Washington, a vote against referendum 71 would actually take away domestic partner benefits from LGBT couples. Approve 71 has released their first ad, featuring a lesbian couple who has been together for 31 years.

In Maine, the fight is over marriage. The legislature passed a marriage equality law earlier this year, and the same forces who pushed through Prop. H8 in California have reassembled to try and revoke the law in Maine. This will feature two highly motivated forces with a clear decision to make on an issue of progressive values. Unlike in California, the pro-equality forces are well-prepared with a better message. For example, they actually show gay families in their ads:



Forces of bigotry are trying to pull that ad because it features a Roman Catholic mother. I guess they missed both the freedom of speech and the freedom of religion clauses in the First Amendment.

No on 1 just released their funding numbers for the third quarter, and they've raised a whopping $2.7 million dollars (very large for Maine), and have over 8,000 Mainers volunteering for the campaign. The Yes side reported only $1.1 million for the same period. And a brand-new poll shows the No side leading, 51.8%-42.9%. The Yes side is freaking out and sent an urgent email to their list yesterday asking for cash. Expect the Bat-Signal to light up at the Mormon Tabernacle any minute now.

Included in that fundraising total for No on 1 is nearly $1 million dollars in online contributions. The netroots is pushing for a moneybomb on Thursday, October 15, the last day of the financial reporting period. Joe Sudbay explains:

That's why in Maine, we're making one last major pitch before 11: 59 PM on October 15th. That date has special significance for two reasons: 1) It's the last day of the financial reporting period (the last one to be made public before election day); and 2) It's the first day of in-person absent voting. We want the No on 1 campaign to have all the resources it needs -- and to know that in advance [...]

The Courage Campaign, OpenLeft, Pam's House Blend and others are setting a goal to reach $1.1 million in online donations by October 15th. AMERICAblog readers have been very generous already. We beat our first goal of $25,000 and are heading to $50,000 now. Help us get there. And, help us win in Maine.

No on 1 is already at $1.077 million dollars on Act Blue as of 2:30pm ET today, so I'd expect the goal to rise.

The battle on marriage equality is the civil rights movement of the 21st century, and we've seen movement over the year, including yesterday. Whether Democrats have a 16-vote or 18-vote or 20-vote majority in the Senate is less suggestive of a progressive realignment than whether real advances for groups of Americans can be achieved. The fights in Washington and Maine would show that to be the case.

Why The WellPoint Case Matters

Just a few thoughts about why this WellPoint case matters to the overall health care reform debate:

• Maine is a "swing state" for health care reform - Given its Senators, and given this behavior by the insurer who controls over 70% of the local market, obviously a scandal like this in Maine, where Anthem is literally suing the state to guarantee a profit, is deeply embarrassing to the political class if it spreads and becomes a big story.

• Regulation alone cannot work - Here we have a state where insurance companies are regulated much like a public utility. The Superintendent is vested with the power to protect consumers and ensure reasonable rates. And despite that, the insurance company sues for a better profit margin. This is not entirely abnormal among utilities, who troll for a friendly judge to allow them to raise their rates. In the area of health care, however, we are being told that tough regulations will solve the problem of skyrocketing premiums and get everyone covered. I think we know what to expect - lawsuits like this in every state, with private corporations arguing that their corporate personhood status somehow entitles them to a profit - that's basically what they're saying in this lawsuit.

• The for-profit health care system is doomed - in this case, the Maine Superintendent of Insurance allowed Anthem to raise their rates by 10.9% to reach an actuarial "break-even" rate. Over the past ten years, they have raised their rates by double digits 8 times. If you had an individual plan in Maine in 1999, today it probably costs FOUR TIMES as much. That's just not sustainable for anybody. Before long, people will simply not be able to carry health insurance. And they will easily reach the hardship exemptions in the individual mandate in the Congressional bills. If you have to raise your prices by 11% every year just to break even, your business doesn't work. Increasingly, insurance companies are losing market share and only staying in business due to growth in Medicaid and Medicare. Government subsidization of this private industry, in other words, is keeping them alive. So why keep them afloat at all?

In short, this is an important case to expose to understand insurance industry practices and the future of health reform.

Media Discovers WellPoint's "Right To Profit" Case

News outlets are starting to report on Anthem Blue Cross and Blue Shield, a subsidiary of WellPoint, suing the state of Maine to guarantee a 3% profit for themselves. Here's a report from the Maine Public Broadcasting Network:

The state and Maine's largest private insurer Anthem Blue Cross Blue Shield are locked in a legal battle over how much profit Anthem should be able to make. Earlier this year, Maine's insurance superintendent Mila Kofman denied Anthem's request to raise rates for its individual insurance products, calling it "excessive," and instead approved an increase that leaves Anthem without a profit margin for providing those 12,000 policies. Now Anthem has filed suit to get the decision overturned.

"Superintendent has noted that Anthem's done pretty well." Janet Mills is the Maine Attorney General who is representing the superintendent of insurance. Mills' office counters that Anthem averaged a 3.2 percent profit margin in its individual line of products for the nine years that the company has been in Maine. And that going a year without a profit from those products will not drain the company.

"She found that in fact that had contributed to $17.5 million and that its executives were pocketing rather large salaries and bonuses." Anthem spokesman Chris Dugan did not comment on the lawsuit beyond acknowledging that it had been filed. In a brief filed with the Maine Superior Court, however, Anthem calls a 0 percent profit margin unfair and unprecedented; it says it wants to have a profit margin of at least 3 percent.

Remember, the new rates offered by the Maine Superintendent do not prevent Anthem from making a profit; they can do that the same way other companies might do so in a recession, by cutting overhead costs and lowering executive salaries and taking up more efficient management of their business. But as I've reported and as Igor Volsky confirms, Anthem wants the state of Maine to guarantee a 3% profit as a Constitutional right:

A 0% risk and profit charge, by definition, builds in no cushion for any of the risk that Anthem BCBS takes on by selling Individual Insurance Products in Maine. In addition, with a 0% risk and profit charge under the Superintendent’s approved rates, Anthem BCBS will not be able to provide any contribution to the surplus of the Company…Anthem BCBS — a for-profit Company — cannot be required to operate its highly risky Individual Insurance Products essentially as a non-profit company that must offset losses generated by the Individual Insurance Products through its group insurance business in Maine.

This is a fantasy argument from a legal perspective. The Superintendent works for the people, not Anthem BCBS, and she is not required to provide a profit margin for it or any company as an inalienable right. Anthem is a very profitable company already, and the individual market they want to jack up 18.5% represents a small portion of their business (about 6%) which has brought in $17 million dollars over the last decade. The Superintendent can say no, under the law, to allowing Anthem to charge an "additional $12 million in annual premiums for the same level of benefits.” She does not have to guarantee Anthem a profit. WellPoint may be able to cut their own employee health care, but under the regulations of Maine, they cannot squeeze their customers without the Superintendent stepping in to protect them.

The Wonk Room has provided copies of the briefs in the case here and here.

Econo-blogger Robert Waldmann has more. In addition, Ed Schultz ran a segment on the case on his show:

Visit msnbc.com for Breaking News, World News, and News about the Economy

It goes without saying that Maine is a linchpin of health care reform, given the position of their moderate Republican Senators. Maybe they should look into what's happening in their own state.

Subsidiary Of WellPoint Sues Maine To Raise Insurance Premiums 18.5%

A wild story out of Maine.

Anthem Health Plans of Maine, a subsidiary of WellPoint, is suing the state because they want to increase premium rates by 18.5% on their 12,000 individual insurance policy holders, so they can guarantee themselves a 3% profit margin. This story shows how silly it would be to solely rely on regulation to rein in insurance industry practices.

Like many other states, Anthem Health Plans hold a monopoly on the individual insurance market in Maine, controlling 79% of all the plans. Also like many other states, they are licensed to sell insurance through the Department of Insurance, who must clear all rate increases prior to implementation. Originally, Anthem Health Plans were a nonprofit Blue Cross and Blue Shield corporation licensed to practice in Maine since 1939. In 1999, Anthem bought the business and began to operate it as a for-profit company. Since that point, Anthem has raised premium rates 10 times, and 8 of those times have been double-digit rate increases.

Jan-99: 20.4%
Nov-99: 15.7%
Jan-01: 23.5%
Feb-02: 12.7%
Jan-03: 3.4%
Mar-05: 14.5%
Mar-06: 16.3%
Jan-07: 16.7%
Jul-07: 1.3%
Jan-08: 12.5%

The average individual Maine rate-payer is paying four times as much for insurance than they did ten years ago.

But this isn't good enough for Anthem Health Plans. They first proposed a 14.5% rate increase for its individual insurance products, then they revised it up to 18.1% and finally 18.5%. This is an average increase. Some plans would see increase of 24.5%, some 38.4%, and for its Preventive Care and Supplemental Care Accident rider, which is part of 1/3 of all their policies, Anthem proposed a rate increase of 58.2%. This amounts to Maine consumers paying $12 million more in annual premium dollars for the exact same level of benefits.

Anthem isn't hurting for profit. Their Maine operations have generated an average annual return of $70 million dollars over the last five years. Anthem paid dividends to their parent company, WellPoint, of $75 million dollars last year alone, and $152 million since 2006. Their nine highest-paid employees totaled over $4.3 million in compensation. The individual market, while a smaller portion of their overall business, still generated $5.4 million in profit over the last two years.

The reason Anthem desires these rate raises is because their actuarial charts show they can guarantee a 3% profit through this increase. That's an estimate, however, and in 8 of the last 10 years the profit margin achieved has actually been higher. The Maine Superintendent of Insurance ruled in May 2009 that the 3% profit and risk margin sought was "excessive and unfairly discriminatory," as per the laws of the state, and instead approved a rate increase of 10.9% for Anthem. Given the recession, the financial health of the company, and the years of large rate increases, there was no way she could approve anything higher.

So Anthem sued the state. But not after filing revised rates at a 10.9% increase so they could get that going while they litigated for an even higher rate.

The Superintendent of Insurance explained in a court filing that there is no statute mandating that Maine must provide Anthem or any other insurer with a guaranteed profit. Given Anthem's ability as a large operation to cut costs, just as any family must do during a recession, the Superintendent argued there is nothing preventing them from making a profit with a 10.9% rate of premium increase. But Maine is under no obligation to guarantee one. That would be a "socialized profit," which Anthem is asserting the right to without any legal basis in fact. Furthermore, policyholders have contributed $17.4 million in profit to Anthem's bottom line over the past decade, which should be more than enough to cover potential losses from just the individual insurance line this year.

Anthem argued that they were discriminated against relative to other companies in Maine because one other individual insurer was provided a 3% profit and risk margin (that company, MEGA, asked for 2.2% rate increase back in 2007, a far different scenario). This, the corporation said, violated their equal protection rights under the federal and state Constitutions. This is a laughable claim, that the state must guarantee a profit for every insurance company licensed to provide a product. It's nowhere to be found in the Maine Insurance Code, and the Superintendent of Insurance is allowed under Maine law to consider each company's situation individually. In this case, she ruled that a 18.5% increase in premiums would be unfair and excessive.

This is a very revealing case. Those arguing against a public option claim that insurance regulations alone will be sufficient to provide an affordable product for everyone. Here's a case where Maine is attempting to regulate the industry, and the industry sues the state in an effort to grab more profit. While claiming to be on the side of reform, they will fight tooth and nail, and can be expected to do so for every regulation in the national health care bill, right down the line.

Brave New Films has put together a video exposing the practices of Anthem and its parent company WellPoint. You can send your friends in Maine the news about this lawsuit, to highlight this practice. Maine Superior Court will consider this case on Wednesday.

From Maine Superior Court, Civil Action, Docket No. AP-09-29
Anthem Health Plans of Maine, Inc., d/b/a Anthem Blue Cross and Blue Shield v. Superintendent of Insurance, et al.

Rate this story up on Digg and Reddit.

...Arthur Delaney now has this story up at The Huffington Post. He notes that Anthem lied about their individual market performance:

In its filing, Anthem said it had lost $3.7 million on its individual insurance products over the past five years. The AG says Anthem has made $5.4 million from individual consumers over the past two years, and points out that Anthem paid $75.7 million in dividends to WellPoint in 2008, $40.4 million in 2007, and $35.6 million in 2006. And its executives paid themselves pretty well, too.

Good News From Maine

Some encouraging news out of Maine:

A new public poll from Democracy Corps was released yesterday, showing us with a slight lead this race 50% to 41%, a significant jump from kos's numbers from the other week of 46-48.

The numbers are encouraging, but it's that 9% undecided that will determine this race. The investment of our supporters has allowed us to get on TV before our opponents and counter every lie they have tossed at us.

This is exactly slightly better position, from my recollection, than Prop. 8 at this time last year. But clearly, it's very close, and the undecideds will be crucial.

Establishment looky-loos will be checking out VA-Gov and NJ-Gov and possibly NY-23 (which has a conservative, a liberal Republican and a conservative Democrat duking it out, so I don't know how it'll be that descriptive) on November 3 to see if Democrats or Republicans have momentum heading into next year. I would advise them to take a look at this race. In a long-term sense, the winner of the equality fight in Maine will point the way forward for the country. We'll see if we're ready to embrace the future yet. The No on 1 folks are doing a great job so far, and I have faith that they can make this work.

I hate to do back-to-back fundraising pitches, but it is the end of the quarter. Give to No on 1, you'll be happy you were on the right side of history.

Fixing Our Left Coast Mistake

For so many people, the passage of Prop. 8 last November represented a civil rights failure. But it was just as much a political failure. A campaign that could have been about neighbor-to-neighbor contact and recognizing what brings us together rather than sets us apart was instead waged at 30,000 feet. The TV ads for the No campaign never showed one gay couple, and they never spent any resources on door-to-door canvassing. The consultants who ran that campaign (into the ground) claimed that visibility mattered more than personal persuasion (they actually told volunteers to get on a street corner and hold signs instead of interacting directly with people), and the entire race was waged in a defensive crouch, as the Yes campaign would post one lie after another to which the No campaign would belatedly respond.

In November there will be a chance to right this wrong, to apply the proper political means to achieve a civil rights victory. Gay marriage has been legalized by the legislature in Maine (that activist legislature!), and the same forces that passed Prop. 8 in California have qualified a ballot measure to overturn it. Instead of a state with 17 million registered voters, the universe of likely voters in Maine is just around 500,000. The No on 1/Protect Maine Equality campaign figures that they will need between $3-$5 million to wage a successful campaign. Considering the netroots provided nearly $1.5 million for the failed No on 8 campaign, putting a similar amount into a campaign that will actually identify supporters and turn them out to the polls should be an easier task.

If you have any suspicion that the Maine folks don't know what they're doing, take a look at this first commercial, one of the best I've seen on this subject:



The theocrats are targeting Maine as the place where they can turn back the momentum on marriage equality from the past few months. Civil rights campaigns are long and often painful, and sometimes they have to go directly to the people. We can win this time. Support Maine Freedom to Marry.

Remember The Maine

Governor Baldacci just signed the marriage equality bill, making Maine the 5th state to allow same-sex couples the right to marry.

AUGUSTA – Governor John E. Baldacci today signed into law LD 1020, An Act to End Discrimination in Civil Marriage and Affirm Religious Freedom.

“I have followed closely the debate on this issue. I have listened to both sides, as they have presented their arguments during the public hearing and on the floor of the Maine Senate and the House of Representatives. I have read many of the notes and letters sent to my office, and I have weighed my decision carefully,” Governor Baldacci said. “I did not come to this decision lightly or in haste.”

“I appreciate the tone brought to this debate by both sides of the issue,” Governor Baldacci said. “This is an emotional issue that touches deeply many of our most important ideals and traditions. There are good, earnest and honest people on both sides of the question.”

“In the past, I opposed gay marriage while supporting the idea of civil unions,” Governor Baldacci said. “I have come to believe that this is a question of fairness and of equal protection under the law, and that a civil union is not equal to civil marriage.”

“Article I in the Maine Constitution states that ‘no person shall be deprived of life, liberty or property without due process of law, nor be denied the equal protection of the laws, nor be denied the enjoyment of that person’s civil rights or be discriminated against.’”

There's likely to be a ballot measure on this in the near future. For now, same-sex couples can marry in three more states than they could have just weeks ago.

Gay Marriage Snowball Continues Downhill

Maine passed a gay marriage bill out of both houses of its legislature. After a couple procedural votes, the bill moves to Governor John Baldacci's desk for signature. He has recently hinted toward approval while officially remaining undecided.

And the City Council in Washington, DC, approved recognition of out-of-state same-sex marriages, with Marion Barry (yes, he's still a city councilman in Washington) playing the role of sideshow freak:

The vote was originally unanimous, until “councilman Marion Barry proclaimed that he didn’t realize what he was voting for and asked for reconsideration of the measure. The measure was amended to another bill.” Berry said that his nay vote was an “‘agonizing and difficult decision’ that he made after prayer and consulting with the religious community.”

When your only ally is Marion Barry, you aren't in the most advantageous position.

Notably, the DC Council vote forces a vote before Congress, because they hold jurisdiction over city laws. That could get interesting.

Small-Ball and Scrounging

Looks like the McCain campaign is going after Maine-02, while the Obama campaign is looking to flip Nebraska-02. Those are the only states that split electoral votes.

I'm pretty sure they never have split them, so the chances of this are remote. What I'm more interested in is the fact that, with Michigan off the table, McCain's team appears to have conceded Colorado, as I suspected yesterday:

Sen. John McCain (R-Ariz.) now must win Pennsylvania, Wisconsin or Minnesota in order to get enough electoral votes to win the presidency, his campaign says.

Those were considered swing states in 2000 and 2004, but George W. Bush lost them both times.

"Our ability to pick off one of those three states is where our fortunes are largely held," a McCain official said. "These are states where Barack Obama is on the defense."

McCain doesn't need to win any of these as long as he holds the Bush states, in theory. But Iowa and New Mexico are trending away from him, and if he thinks that he has to win one of the above states, they must feel that Colorado and/or Nevada is lost, too.

Wow.

Meanwhile McCain's campaign has gone 100% negative.