IBJNews

Consumer group sues Anthem over policy changes

Back to TopCommentsE-mailPrintBookmark and Share

A consumer watchdog group filed a lawsuit Monday against California's largest for-profit health insurer on behalf of policyholders, claiming they were pushed to take coverage with fewer benefits and higher deductibles.

In the case filed in Ventura Superior Court, Anthem Blue Cross is accused of violating a California law requiring health insurers to offer new, comparable coverage or minimize premium increases when they close a policy.

According to the lawsuit, plaintiffs Mary Feller and Randy Freed received similar form letters from the Woodland Hills-based insurer, stating their policies were closed and they could "switch to any Anthem Blue Cross individual health plan with no underwriting required."

The lawsuit alleges that the few plans Anthem would allow Feller and Freed to switch into had higher premiums, higher deductibles, less coverage, or a combination of those undesirable traits.

Anthem Blue Cross spokeswoman Peggy Hinz said the insurer hasn't yet reviewed the case, declining further comment.

Consumer Watchdog, a Santa Monica-based consumer advocacy group, filed the case on behalf of Feller and Freed. The lawsuit seeks class action status.

When the practice was outlawed in 1993, legislative analysts called it a "death spiral" because rates inevitably increased until policyholders could no longer afford coverage. As the coverage pool shrank over time, rates went up and up.

"It's a very profitable practice, and what we know is the insurance industry is very focused on short-term returns," said Jerry Flanagan, a health advocate for Consumer Watchdog.

With her family's premiums up to nearly $25,000 a year, Feller says she, her husband and daughter — a cancer survivor — are spending more on health insurance premiums than they do on their mortgage, "and we live in Marin County, California, which is one of the costliest real estate markets in the country."

"I think for the first time, we're really scared that we're going to be without health insurance," she said.

The lawsuit comes on the heels of government scrutiny of a steep Anthem Blue Cross rate hike for roughly 700,000 individual policyholders in California. The hikes average 25 percent — some premiums will rise as much as 39 percent — but implementation of the hike has been delayed until May 1 while a state regulator investigates.

Anthem executives have blamed the current economic climate, flaws in the national health care system, high costs of health care and fewer young, healthy people holding onto insurance policies for the rate hikes.

The Obama administration has called Anthem's hike a harbinger of rising premiums in its arguments for health care reform.

In special hearings last week, California legislators and the U.S. House of Representatives questioned executives from Indianapolis-based WellPoint, Anthem's parent company, about proposed premium hikes in California, Maine and elsewhere.

ADVERTISEMENT

  • mark my words...
    ...I have a VERY special place in hell reserved for thes corporate evildoers whose sole purpose is to enrich their earthly pockets while selling their eternal souls to the devil, and unfortunately people are dying because of the GREED of these whores...really, Larry GLASSCOCK, Braly and the rest of these corporate criminals should burn forever for their sins!!!

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. The east side does have potential...and I have always thought Washington Scare should become an outlet mall. Anyone remember how popular Eastgate was? Well, Indy has no outlet malls, we have to go to Edinburgh for the deep discounts and I don't understand why. Jim is right. We need a few good eastsiders interested in actually making some noise and trying to change the commerce, culture and stereotypes of the East side. Irvington is very progressive and making great strides, why can't the far east side ride on their coat tails to make some changes?

  2. Boston.com has an article from 2010 where they talk about how Interactions moved to Massachusetts in the year prior. http://www.boston.com/business/technology/innoeco/2010/07/interactions_banks_63_million.html The article includes a link back to that Inside Indiana Business press release I linked to earlier, snarkily noting, "Guess this 2006 plan to create 200-plus new jobs in Indiana didn't exactly work out."

  3. I live on the east side and I have read all your comments. a local paper just did an article on Washington square mall with just as many comments and concerns. I am not sure if they are still around, but there was an east side coalition with good intentions to do good things on the east side. And there is a facebook post that called my eastside indy with many old members of the eastside who voice concerns about the east side of the city. We need to come together and not just complain and moan, but come up with actual concrete solutions, because what Dal said is very very true- the eastside could be a goldmine in the right hands. But if anyone is going damn, and change things, it is us eastside residents

  4. Please go back re-read your economics text book and the fine print on the February 2014 CBO report. A minimum wage increase has never resulted in a net job loss...

  5. The GOP at the Statehouse is more interested in PR to keep their majority, than using it to get anything good actually done. The State continues its downward spiral.

ADVERTISEMENT