Anthem Blue Cross faces lawsuit over size of deductibles for health insurance

Health Insurance Consumer Watchdog has filed a lawsuit against Anthem Blue Cross, claiming that the insurer is using “bait and switch” tactics to increase the out-of-pocket expenses and deductibles which must be paid by some of their consumers.

This is the second time in a period of eight months that the largest for-profit insurance company in California has faced a lawsuit over claims that its contracts with customers had been breached by mid-year deductible increases.

In this most recent case, Consumer Watchdog alleges that over 100,000 policyholders have experienced a misrepresentation of their coverage costs, which is a violation of state laws.

The lawsuit itself claims that on August 1, 2011, Woodland Hills-based Anthem Blue Cross altered its renewal periods improperly, changing them from a term of one year to a one month term, instead. It contends that this behavior permitted the insurer to modify its benefits and costs such as co-payments frequently, all year long.

According to the Consumer Watchdog staff attorney, Jerry Flanagan, “When Blue Cross changes annual deductibles and other costs and coverage at [a] whim, the result is a moving target.” He added that this leaves consumers without any ability to determine how much coverage they will receive or how much they will be required to pay.

In response, though, Darrel Ng, a spokesperson from Anthem Blue Cross, has stated that the insurer cannot comment specifically about these pending litigations, but asserts that the insurer maintains a painstaking effort to keep its coverage affordable and that state officials closely monitor all of its business decisions.

He added that there is significant regulation of health insurance plans by state authorities, and that all changes in deductibles were approved by state regulators who were fully knowledgeable of them.

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