Representatives from Anthem Blue Cross Blue Shield met March 4 with the Board of Selectmen to discuss Anthem’s projected 28 percent health insurance increase, as expressed in the 2010-2011 town budget.

One reason for the hike was an increase in the town’s claims, according to Matthew Bowker, Anthem’s North Haven account manager. Bowker said that town claims from 2009 and 2010 equaled $7.49 million, a 21.86 percent increase from $6.14 million in 2008-2009.

Bowker added that a national change in lifestyles was also part of the hike, as the current economic recession has increased the nation’s stress level and paired those able to afford health insurance to those who would actively need it. The state’s subsidizing of COBRA insurance also affected the hike, Bowker said, as Connecticut is “one of the more heavily-mandated states.”

Bowker said that if North Haven’s claims trended downward in the near future, it would be represented in Anthem costs. “If the claims are improving, then the savings will be given back to you,” he said.

“If February claims are dramatically reduced, it will help our cause,” said First Selectman Michael Freda. “And with the claims history analysis, every month that goes by could help us before we decide what to do.”

Third selectman Steve Fontana asked why Anthem had previously projected a lower renewal cost when bidding to gain the town back from ConnectiCare. Bowker answered that the town’s claims have changed significantly since then. “There have been 10 claimants over $50,000,” he said. “The methodology hasn’t changed. At that time, the town’s claim experience was better than it is today.”

Fontana asked whether Anthem used the same renewal calculations with all municipalities. Bowker answered that the company did. Second selectman Tim Doheny asked if all municipalities had similar percentage increases. Bowker answered that they did.

“Hamden stayed with Anthem while North Haven was with ConnectiCare and still had an equal rise,” Fontana said. “So North Haven’s projected rise is not because of its year with ConnectiCare?”

“Correct,” Bowker replied.

During public comment with Anthem, resident Bob Demauro asked what the specific drivers were behind the projected North Haven increase.

“The drivers vary per town, but lifestyle is the driving force,” Bowker said.

Bowker added that North Haven is “a little high” in asthma and coronary heart disease. In terms of a base mathematical breakdown, Bowker said that Anthem’s charges are 80-90 percent claims costs and 10-15 percent administration costs.

Demauro believed a driver to be Anthem’s control of the situation. “You and Major League Baseball are basically the same,” he said to Bowker. “You have no competition. If you don’t play for Major League Baseball, you don’t play baseball in the USA. If you don’t buy insurance from the big five insurance companies, you don’t get insurance. Money is the driver.”

Anthem vice president James Augur refuted the claim. “There is competition in Connecticut,” he said to Demauro. “There are five great insurance companies in Connecticut. Here in Connecticut, I do believe there’s good competition on a daily basis.”

Resident Sherman Katz recalled that when a company he worked for was about to go to a different carrier, Anthem lowered its prices to retain the contract. “Once we sharpen our pencils, Anthem will come down from where they are now,” Katz said.

Resident and Board of Finance member Michael Hallahan asked whether Anthem’s administration costs have risen. Auger said they had not. “What is driving the premium increase in North Haven are the claims,” Auger added.

Freda said that the town is not resigned to Anthem. “We are examining all the options,” he said, “including going out to bid, and including going back to the drawing board with self-insurance.”