Anthem hiked deductibles, breached member contracts, lawsuit alleges

Anthem Blue Cross in California used "bait and switch" tactics to change the terms of customer contracts to charge them more for deductibles and other out-of-pocket expenses, according to a class-action lawsuit. This practice has allegedly affected more than 100,000 people, the Los Angeles Times reports.

The Washington, D.C.-based consumer advocacy organization Consumer Watchdog filed the suit, alleging California's largest for-profit insurer improperly adjusted its renewal periods from one-year to one-month terms, thereby allowing the insurer to repeatedly modify its benefits and costs all year long, according to Live Insurance News. The insurer also allegedly altered other terms of the contracts on just 60 days notice.

"When Blue Cross changes 'annual' deductibles and other costs and coverage at a whim the result is a moving target. Consumers are left with no certainty about what they will have to pay and what coverage they'll receive," said Jerry Flanagan, staff attorney for Consumer Watchdog. "If Blue Cross is allowed to boost profits by changing prices and reducing coverage every two months, then the 'contract' is worthless."

Although Anthem said it can't comment on pending cases, spokesperson Darrel Ng said California highly regulates health plans, and all changes were made with the knowledge and approval of state regulators. However, the lawsuit says consumers enrolled in plans policed by the California Department of Health Care Management still saw their premiums jump by more than 20 percent, notes the Santa Monica Daily Press.

Consumer Watchdog's suit is similar to a separate complaint filed in March by another Anthem customer, which accused the insurer of raising deductibles midyear for medical care and prescription drugs, as well as increasing maximum out-of-pocket expenses, notes the LA Times.

To learn more:
- read the Consumer Watchdog complaint (.pdf)
- read the Los Angeles Times article
- see the Santa Monica Daily Press article
- check out the Live Insurance News article

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