APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MAINE [Hon. George Z. Singal, U.S. District Judge]
The opinion of the court was delivered by: Howard, Circuit Judge.
Before Lynch, Chief Judge, Lipez and Howard, Circuit Judges.
In October 2011, the State of Maine enacted L.D. 1326, "An Act To Allow School Administrative Units To Seek Less Expensive Health Insurance Alternatives," pursuant to which health insurers must disclose, upon written request from a public school district, aggregate loss information pertaining to any group policies held by the district's employees.*fn1 L.D. 1326, 125th Leg., 1st Reg. Sess. (Me. 2011). Shortly thereafter, plaintiff-appellant Maine Education Association Benefits Trust (the "Trust") -- which manages a statewide health insurance plan for a substantial segment of Maine's public school work force -- filed suit in the district court, seeking to permanently enjoin the law prior to its enforcement. The Trust alleged, inter alia, that because its loss information constitutes a confidential trade secret, the Act's disclosure requirement results in an uncompensated taking proscribed by the Fifth Amendment. The district court denied the Trust's motion for a preliminary injunction, and the Trust now challenges that denial in this timely appeal. After careful consideration, we affirm.
A brief overview of the Trust, its health insurance plan, and the statutory scheme at issue is necessary for an understanding of the claims presented on appeal. The district court's thoughtful and comprehensive order, see Maine Educ. Ass'n Benefits Trust v. Cioppa, No. 1:11-cv-381-GZS, 2012 WL 363923 (D. Me. Feb. 3, 2012), contains a detailed exposition of the undisputed facts, from which we borrow.
A. The Trust and Its Health Insurance Plan
Since 1993, the Trust has provided health insurance to the bulk of Maine's public school employees and their dependents through a plan underwritten by various insurers, most recently Anthem Blue Cross Blue Shield of Maine ("Anthem"). The insurance plan (the "Plan"), which currently covers nearly 67,000 members from 99 percent of Maine's school districts, is community-rated; that is, the price of coverage is negotiated on the basis of group-wide utilization costs, and accounts for neither geographic variation nor an individual employer's demographic mix, prior utilization, or loss experience. This community-rated plan is designed in part to subsidize, through members who are actuarially favorable, the premiums paid by members who are actuarially less attractive to insurers. The Plan as designed economically benefits employees of educational institutions whose work forces are older or less healthy than other members of the group, or who reside in regions -- typically Northern and Eastern Maine -- with higher health care costs and, on average, lower salaries than their Southern Maine counterparts. The Plan is thus structured, in part, to help mitigate this disparity.
Eligibility for enrollment in the Plan is determined by the collective bargaining agreements negotiated between local bargaining units and individual employers, predominantly school districts. The employees of a given school district are eligible to participate in the Plan if the largest collective bargaining unit in that district is represented by the Maine Education Association ("MEA"), the statewide teachers' union that founded the Trust. Once eligibility has been established, the school board and the employees decide together, by a collaborative vote, whether the employees will be offered the Plan. Those who receive the offer and elect to enroll do so directly with the Plan's insurer, Anthem. The Trust has no contracts with individual educational institutions, and those institutions are not considered to be sponsors of the Plan. Rather, based on the amount agreed to in its own collective bargaining agreement, each school district pays to the Plan a percentage of its employees' health insurance premiums, and the employees are responsible for the remainder.
For the most recent plan year for which there was evidence at the preliminary injunction hearing, the Plan's annual premium was nearly $370,000,000, resulting in an average monthly cost of approximately $460 per member. The Trust itself maintains a reserve fund that, according to its last available audit, held in excess of $87,000,000. The Trust uses the reserve fund to buy down rate increases, thereby avoiding inflation in the monthly cost charged to Plan participants.
Similar to the other states, Maine heavily regulates the insurance industry. "Title 24-A, the 'Maine Insurance Code,' has 85 separate chapters and fills almost two complete volumes of the Maine Revised Statutes Annotated. There is [also] an entire department of State Government, the Insurance Bureau, devoted to regulating the business of insurance." Lessard v. Allstate Ins. Co., No. Civ. A. cv-98-162, 2001 WL 1712653, at *4 (Me. Super. Ct. March 12, 2001).
Under Maine's regime, the state has historically compelled the disclosure of basic "loss information," generally defined as the aggregate claims experience of a given policy, or more specifically, the ratio of premiums charged to claims paid -- in short, a simple equation, and the applicable data, for deciphering the purchaser's own healthcare costs. For example, Maine law has entitled holders of property and casualty insurance policies to obtain such loss information from their carriers since 1989, see 1989 Me. Laws, Ch. 696, "An Act Requiring the Availability of Insurance Loss Information" (codified at Me. Rev. Stat. Ann. tit. 24-A, §§ 2910, 3042). In 1995, this access was expanded to cover current and former policyholders of group and blanket health insurance, see 1995 Me. Laws, Ch. 71, "An Act to Require Insurance Companies to Provide Loss Information to Insured Groups" (codified at Me. Rev. Stat. Ann. tit. 24-A, § 2803-A) ("Disclosure of Loss information. Upon written request, every insurer shall provide loss information concerning a group policy or contract to its policyholder . . . ." (emphasis added)). L.D. 1326 is incidentally more expansive, extending the right of access not just to "policyholders," but also to the small subgroup of public school districts whose employees are enrolled in a shared health insurance policy.
In seeking preliminary injunctive relief, the Trust mounted challenges to the two provisions of the Act that deal with loss information, codified at 20-A M.R.S.A. § 1001(14)(E) and 24-A M.R.S.A. § 2803-A(2). As amended, 20-A M.R.S.A. § 1001(14)(E) states, in pertinent part:
Insurance purchase by competitive bidding . . .
E. In order to facilitate the competitive bidding process in procuring health insurance for a school administrative unit's employees under this subsection, a school administrative unit may request from the insurer providing health insurance coverage to its employees and retirees loss information concerning all of that school administrative unit's employees and retirees and their dependents covered under the school administrative unit's policy or contract pursuant to Title 24-A, section 2803-A.
24-A M.R.S.A. § 2803-A(2) reads, in turn:
2. Disclosure of basic loss information. Upon written request, every insurer shall provide loss information concerning a group policy or contract to its policyholder, to a former policyholder or to a school administrative unit pursuant to Title 20-A, section 1001, subsection 14, paragraph E within 21 business days of the date of the request. This subsection does not apply to a ...