Going to Court
California's Consumer Watchdog group is suing Anthem Blue Cross after
they raised health care insurance premiums 39 percent, but the company
isn't budging. Meanwhile Goldman Sachs recommended buying health insurance company
stock because competition is decreasing and prices are going up. The
Center for Retirement Research at Boston College estimates that "the
typical married couple at age 65 should expect to spend" a whopping
$197,000 on uninsured medical expenses. Obama urges action on a
watered-down health care bill, but the Republicans and conservative
Democrats just say no and collect money from the private health care
lobby. Will we continue to tolerate skyrocketing health care costs?
A judge will hear testimony on three related cases surrounding ballot
language for Proposition 17, which backers say will allow discounts for
more drivers and opponents claim will create back-door rate increases.
The latest is Attorney General Jerry Brown's attempt to change the
official title and summary to say the measure "will allow insurance
companies to increase cost of insurance to drivers who do not have a
history of continuous insurance coverage," according to the lawsuit.
Due to what Brown's office argued is its error, the language submitted
by the attorney general to the California Secretary of State reads,
"may allow insurance companies to increase cost of insurance to drivers
who do not qualify for discount."
There have been demands for explanations from state and federal
lawmakers as well as the White House. Documents of financial records
have been subpoenaed. Last week, Consumer Watchdog filed a lawsuit in
Ventura County Superior Court alleging the insurer doesn’t offer
adequate alternatives when it closes a policy.
A consumer group has filed a class-action lawsuit against Anthem Blue
Cross of California, alleging the company's strategy in deploying an
average 25% rate increase for individual plan customers violates state
law. The lawsuit was filed by Consumer Watchdog on behalf of two Anthem
policyholders who are covered under a program the insurer closed to new
enrollees on Sept. 25, 2009. This triggers a "death spiral" as rate
increases fall to "those remaining in the closed book of business until
they can no longer afford coverage," the lawsuit stated.
The company used controversial rate hikes, as high as 39 percent, to force older and sicker customers into high-deductible plans with fewer benefits so it could save money, Santa Monica-based Consumer Watchdog alleged in the complaint. The lawsuit seeks to end that tactic of "closing" an insurance product and raising rates to members while offering them cheaper plans, which plaintiffs say is known in the industry as the "death spiral."
On Monday, Consumer Watchdog filed a lawsuit seeking class-action
status against Anthem Blue Cross, alleging that the insurer is forcing
subscribers into a coverage "death spiral." The suit, filed in Ventura
Superior Court, accuses Blue Cross of hiking premiums to force
subscribers from benefit-rich policies to less expensive coverage with
fewer benefits and higher deductibles. The scrutiny has been welcomed by many, including consumer health care advocacy groups.
The Santa Monica-based advocacy group Consumer Watchdog brought the
suit, saying Anthem violated a 1993 state law that requires health
insurance companies to offer comparable coverage or minimal premium
hikes if they cancel a policy. "Today's lawsuit is just the beginning of what is going to have to be a
much more profound change in the state of California when it comes to
healthcare," said Harvey Rosenfield, Consumer Watchdog's founder.
SANTA MONICA, Calif. (KABC) --
A consumer watchdog group filed a lawsuit Monday against California's
largest for-profit health insurer on behalf of policyholders, claiming
they were pushed to take coverage with fewer benefits and higher
deductibles. "Anthem Blue Cross has been in the
news a lot because Anthem Blue Cross is very good at gouging people,"
said Jerry Flanagan, a health advocate for Consumer Watchdog. "They are
the market leader, not only the largest insurance carrier, but they are
the best at charging people more for less coverage." Consumer
Watchdog says it's called a "death spiral" because rates inevitably
increased until policyholders could no longer afford coverage. They say
that's against California law.
The lawsuit seeks class action status and is being brought by Consumer
Watchdog, a Santa Monica-based consumer advocacy group, on behalf of
Feller and Freed. When the practice was outlawed in 1993, legislative analysts called it
a "death spiral" because rates inevitably increased until policyholders
could no longer afford coverage. As the coverage pool shrank over time,
rates went up. "It's a very profitable practice, and what we know is the insurance
industry is very focused on short-term returns," said Jerry Flanagan, a
health advocate for Consumer Watchdog.
OAKLAND — A consumer group has sued Anthem Blue Cross for allegedly
using its widely publicized rate hikes to attempt to force customers
into lower benefit and higher deductible plans, a tactic the group
calls a "death spiral." Many of the individual policyholders who recently learned their
premiums would jump by as much as 39 percent were informed several
months ago that Anthem Blue Cross was closing their plan to new
customers, The firm then offered them plans with greatly reduced
benefits, the class-action lawsuit filed by Consumer Watchdog says. "These customers are then forced to accept greatly inferior coverage or
to drop it altogether," said Harvey Rosenfield, founder of Consumer
Watchdog.
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