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By Sandy Kleffman
[email protected]
Posted: 03/02/2010 06:05:36 PM PST
Updated: 03/02/2010 09:32:15 PM PST
A consumer group has sued Anthem Blue Cross for allegedly using its widely publicized rate hikes to attempt to force customers into lower benefit and higher deductible plans, a tactic the group calls a "death spiral."
Many of the individual policyholders who recently learned their premiums would jump by as much as 39 percent were informed several months ago that Anthem Blue Cross was closing its plan to new customers, The insurer then offered plans with greatly reduced benefits, the class-action lawsuit filed by Consumer Watchdog says.
Many healthy patients have options and can switch, the lawsuit says. Older patients and those with pre-existing conditions cannot change to a comparable or better policy, so they are essentially trapped in their existing coverage and forced to pay ever-increasing premiums until they can no longer afford it, the lawsuit argues.
These customers are then forced to accept greatly inferior coverage or drop it altogether, said Harvey Rosenfield, founder of Consumer Watchdog.
Burlingame attorney Ronald Galasi has filed a lawsuit against Anthem on his own behalf. He says the increases proposed by Anthem and its Indianapolis-based parent company WellPoint are "excessive, abusive and discriminatory." Galasi is seeking unspecified damages and a court order to halt the increases.
The lawsuit by Consumer Watchdog asserts that Anthem's rate hike violates a state law requiring health insurers that close a
policy to offer consumers comparable coverage or to minimize premium increases in their existing plans.
Peggy Hinz, a spokeswoman for Anthem Blue Cross, said the firm has not yet seen the lawsuit and could not comment.
The company was set to raise the rates March 1, but agreed to delay the increase until May to give the state Department of Insurance time to investigate.
Joined by leaders of the California Nurses Association, Rosenfield said the group will consider gathering the 700,000 signatures needed to put an initiative on the 2012 ballot that would give state officials the power to regulate large premium increases. The 2012 election would be the earliest for which such a measure could qualify.
Bay Area News Group reporter Joshua Melvin contributed to this report. Contact Sandy Kleffman at 925-943-8249.
Consumer group, Burlingame attorney sue Anthem Blue Cross over rate hikes - San Jose Mercury News
[email protected]
Posted: 03/02/2010 06:05:36 PM PST
Updated: 03/02/2010 09:32:15 PM PST
A consumer group has sued Anthem Blue Cross for allegedly using its widely publicized rate hikes to attempt to force customers into lower benefit and higher deductible plans, a tactic the group calls a "death spiral."
Many of the individual policyholders who recently learned their premiums would jump by as much as 39 percent were informed several months ago that Anthem Blue Cross was closing its plan to new customers, The insurer then offered plans with greatly reduced benefits, the class-action lawsuit filed by Consumer Watchdog says.
Many healthy patients have options and can switch, the lawsuit says. Older patients and those with pre-existing conditions cannot change to a comparable or better policy, so they are essentially trapped in their existing coverage and forced to pay ever-increasing premiums until they can no longer afford it, the lawsuit argues.
These customers are then forced to accept greatly inferior coverage or drop it altogether, said Harvey Rosenfield, founder of Consumer Watchdog.
Burlingame attorney Ronald Galasi has filed a lawsuit against Anthem on his own behalf. He says the increases proposed by Anthem and its Indianapolis-based parent company WellPoint are "excessive, abusive and discriminatory." Galasi is seeking unspecified damages and a court order to halt the increases.
The lawsuit by Consumer Watchdog asserts that Anthem's rate hike violates a state law requiring health insurers that close a
policy to offer consumers comparable coverage or to minimize premium increases in their existing plans.
Peggy Hinz, a spokeswoman for Anthem Blue Cross, said the firm has not yet seen the lawsuit and could not comment.
The company was set to raise the rates March 1, but agreed to delay the increase until May to give the state Department of Insurance time to investigate.
Joined by leaders of the California Nurses Association, Rosenfield said the group will consider gathering the 700,000 signatures needed to put an initiative on the 2012 ballot that would give state officials the power to regulate large premium increases. The 2012 election would be the earliest for which such a measure could qualify.
Bay Area News Group reporter Joshua Melvin contributed to this report. Contact Sandy Kleffman at 925-943-8249.
Consumer group, Burlingame attorney sue Anthem Blue Cross over rate hikes - San Jose Mercury News
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