Anthem Blue Cross agreed to end midyear policy changes that raise costs for consumers and to reimburse nearly $8.3 million to about 50,000 customers in California as part of a settlement of a class-action lawsuit announced Tuesday.
The settlement resolves two lawsuits filed by policyholders in Los Angeles County Superior Court in 2011 alleging that the state's largest for-profit health insurer increased annual deductibles and other yearly out-of-pocket costs on individual policies in the middle of the year.
Anthem Blue Cross was accused of breach of contract and engaging in unfair business practices.
Dave Jacobson, one of the plaintiffs, said he experienced this first-hand after he enrolled in a Blue Cross PPO Share $500 individual plan. In April 2011, he received medical services and Anthem Blue Cross acknowledged that he met his deductible and paid 70% of his bill. When he went back for follow-up tests three months later, he was told he needed to pay $50 more toward his deductible before the insurance company paid its percentage for his care.
"My deductible had become a moving target," Jacobson, a Santa Monica resident, said Tuesday at a news conference in Santa Monica held by some of the plaintiffs and their lawyers. "It's as if Anthem Blue Cross changed the rules of the game in the middle of the game."
According to the lawsuit, the midyear change to Jacobson's yearly out-of-pocket maximum increased to $5,850 from $5,000. His annual prescription drug deductible increased to $275 from $250.
Anthem Blue Cross did not admit liability but agreed to settle to avoid "further expense," according to the settlement. In an email, company spokesman Darrel Ng said, "Anthem is pleased that all parties were able to come to an agreement."
Anthem Blue Cross agreed to mail notices to affected customers and to post information about the agreement on a public website.
Checks will be mailed in December to 50,000 consumers, according to Consumer Watchdog, which jointly represented the plaintiffs. The average amount will be $167, although one unidentified consumer will receive $19,000 to compensate for particularly high out-of-pocket costs.
Only consumers affected by the midyear policy changes will receive settlement checks, but all Californians enrolled in individual Anthem health plans will be subject to the agreement that prevents such cost increases in the future.
"When you look at this settlement, it's such a no-brainer," said Ricardo Echeverria, an attorney for the plaintiffs. "What this settlement does is it holds the insurance company accountable to the terms they promised."
Four named plaintiffs in the court case will receive an additional $10,000, subject to court approval.
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