Lawsuit: Blues illegally denies Medigap coverage

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Blue Cross Blue Shield of Michigan is facing a class-action lawsuit from the state's former attorney general who claims the insurer has been illegally denying some members from accessing certain Medigap plans.

Former Michigan Attorney General Mike Cox, who now manages his private law firm, sued the state's largest insurer on behalf of a retired Ford Motor Co. employee. Catherine Liller sought Medigap coverage through Blue Cross's Medigap Legacy C plan, but the insurer denied her access because she receives health reimbursements from Ford each month, reported Michigan Live.

Cox found that Blue Cross has denied coverage in its popular Medigap plans to thousands of other customers because they have either health reimbursements or a health savings account, which essentially forces Liller and others into buying a less expensive plan with reduced coverage, buying a more expensive plan or forgoing coverage altogether, according to the Observer & Eccentric.

"If you sell Medigap insurance, you cannot deny someone a policy," Cox said. "It's a federally regulated insurance plan and you cannot underwrite them nor can you discriminate against them because they may or may not have a retirement benefit."

But Blue Cross says the lawsuit has no merit. It said Medigap is a subsidized product for retirees whose former employers don't provide financial assistance, but Liller has a reimbursement benefit from Ford, the Associated Press reported.

What's more, Blue Cross Spokeswoman Helen Stojic said the company complies with all regulations, and the Michigan insurance department already has reviewed its underwriting policies, Michigan Live noted.

To learn more:
- read the Michigan Live article
- see the Observer & Eccentric article
- check out the Associated Press article

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