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Consumer group sues California health insurer
LOS ANGELES |
LOS ANGELES (Reuters) - Consumer advocates filed a class-action suit against Anthem Blue Cross on Monday, accusing California's largest for-profit health insurer of illegally using drastic rate hikes to force customers into inferior health plans.
The suit comes two days before top executives from several major U.S. health insurers, including Anthem's parent company, WellPoint Inc. , were to meet in Washington with Obama administration officials to discuss escalating premiums.
Anthem's plan to boost its individual premiums by as much as 39 percent has spawned inquiries by state regulators and congressional committees. The White House and Democrats on Capitol Hill also have seized on Anthem's proposed rate hikes in seeking to bolster support for a renewed drive to overhaul the nation's health care system.
The lawsuit in California claims Anthem violated state law by closing certain blocks of its individual health plans to new members without offering comparable coverage to policyholders who opted to remain.
Over time, the pool of older, sicker customers who choose to stay end up trapped in the closed policies, prevented by pre-existing medical conditions from finding affordable plans elsewhere and subjected to rising rates until finally forced to accept lesser insurance or to drop coverage altogether. If they do switch, it is often to plans with fewer benefits, higher deductibles or both, the suit says.
'GUN TO OUR HEADS'
"Blue Cross has a gun to our heads," Mary Feller of San Rafael, Calif., one of the named plaintiffs in the suit filed in Ventura County Superior Court by the advocacy group Consumer Watchdog on behalf of policyholders.
"We could either stay with our old coverage or switch to a new policy with much lower benefits. What Blue Cross did not tell us was that staying with our better policy would mean a 39 percent rate increase," Feller said in a statement announcing the class-action complaint.
There was no immediate comment from the insurance company, or from the state Department of Managed Health Care, which regulates Anthem Blue Cross policies. But industry executives have said climbing premiums reflect soaring medical costs.
Since 1993 California law has required insurers to protect individual policyholders from being caught in circumstances the industry refers to as a "death spiral," the suit says.
Insurers must either offer customers of closed plans a comparable alternative or pool the risk of those individuals with customers in policies that remain open in order to minimize their premium hikes, the suit says.
About 800,000 Californians hold health insurance policies with Anthem Blue Cross, accounting for the biggest share of some 2 million people with individual coverage in the state, said Jerry Flanagan, health care policy director for Consumer Watchdog.
By comparison, health maintenance organizations (HMOs) make up the bulk of California health plans, covering some 21 million patients. But individual policies are often the only option for those who are self-employed or do not receive health care coverage through their jobs.
The lawsuit, Feller and Freed vs. Anthem Blue Cross, Case No. 56-2010-00368587-CU-BT-SIM, seeks unspecified restitution for the plaintiffs and a court order barring future alleged violations of the state health and safety code.
Hey Republicans,
This is what your do nothing Senators and Representatives are bringing down on all of us. Just remember, there but for the grace of God go I. You could be next.
Don’t forget the conservative activist judges on the Extreme Court who are in the pockets of Big Business.
Government needs to break all of the Health Insurers up so there is more competition creating more competitive rates being offered to us.
Insurance companies work in collusion with the AMA and other entities to keep procedures and consultations highly priced. This is called price fixing.
For example; a CT scan machine costs on average $300-500k. Most hospitals run them 24 hours a day. The last time I got one, the cost was around $6k. I have really good insurance, so I only had to pay around $300.
So lets say they run 40-60 a day (I’ve been told by medical assistants that this is a conservative estimate in a large urban hospital). Thats $240,000-360,000 PER DAY!
Now I know I haven’t figured for personell and overhead, but what gives?
Healthcare Reform+Public Option= Price fixing go Bye-Bye
Health insurance companies spent 1 million dollars per day on anti-reform advertising during the height of the health care debates. That really ate into their profits, so now we, the customers, must pay for it. Health insurance is not about health it’s about corporate profits.
OK, 80% of people aren’t going to understand what I am saying and fly off half cocked…
So think before you respond.
If BMW suddenly raised their prices 39% most people would say that they can do whatever they want because they are a private business. People would also say that 1) the cost of a BMW was too much and they are buying a Civic, or 2) they are OK with the cost.
Why is Anthem/Blue Cross any different? it is a private company.
This is why we need socialized health care. Some things shouldn’t be for profit.
“This is how to scam the American public.”
Here, let me finish this one.
First, create an enemy that doesn’t exist. Use the media to pump fear into the hearts of the general public. Bomb the living daylights out of the enemy nation illegally. Redirect tax dollars into the pockets of your cronies to “rebuild” the “enemy” nation.
Pretend to fly a bomber plane onto an aircraft carrier. Spend the rest on a “Mission Accomplished” banner. Become a quasi-hero in the eyes of the simple minded.
You think this is bad? Just wait until Obama’s so-called reform goes through. Obama will mandate services on the front-end, and cap premiums on the back-end. Goodbye Blue-Cross. Hello, rationed Obamacare. Think you will be able to sue the government over your crappy, expensive health care? I don’t think so. You will take what your master gives you and be happy with it.
Obama’s plan is a Progressive trojan horse. You don’t have to believe me – Rep Ryan did an excellent job at pointing out how Obamacare will bankrupt the country. Were you listening? I have yet to see anyone refute the critical financial analysis that Rep Ryan delivered.
