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Plaintiffs Suing Over Anthem Blue Cross Of California Cuts Denied TRO

REUTERS

(Reuters) - The plaintiff in a proposed class action accusing Anthem Blue Cross of California of engaging in a "bait and switch" by telling its individual customers that it will renew their health insurance plans for next year while actually slashing benefits has lost a motion for a temporary restraining order.

Judge John Shepard Wiley Jr. of the Superior Court of California, Los Angeles County denied the plaintiffs' motion for a TRO at a hearing on Tuesday, according to Jerry Flanagan of the non-profit Consumer Watchdog, a lawyer for the named plaintiff, California resident Paul Simon, who filed the lawsuit on Oct. 31.
Wiley said he could not issue a TRO because the plaintiff had not yet been injured by changes to his plan, which take effect in January, according to Flanagan.

Flanagan said Simon and his lawyers had not decided whether to appeal the ruling. A hearing on the scheduling of the case going forward is set for Jan. 9, Flanagan said.

Anthem spokesman Darrel Ng said in an email the company was pleased with the decision. Ng had said two weeks ago in response to the lawsuit that Anthem's policy changes had been approved by state regulators and that the lawsuit was meritless.

The lawsuit comes at the beginning of the open enrollment period during which individuals can buy health insurance for next year under the Affordable Care Act. Though president-elect Donald Trump and Republican lawmakers, who control both houses of Congress, have vowed to repeal the law, plans bought on its insurance exchanges now are expected to remain in effect through 2017.

The plaintiffs claim Anthem is switching customers without warning from plans that provide some coverage of services provided by doctors and hospitals outside of Anthem's network to plans that offer no out-of-network coverage at all, violating the ACA and state law. They are seeking an order requiring Anthem to leave customers' existing plans in place.

Earlier this year, Anthem sent many California customers notices that their plans would be renewed if they took no action, according to the lawsuit. The affected plans are Preferred Provider Organizations, or PPOs, which provide coverage for some out-of-network providers.

In fact, the lawsuit says, if they take no action they will be switched to Exclusive Provider Plans, or EPOs, which do not include any out-of-network coverage, potentially leaving patients with thousands of dollars in additional medical costs. Some patients may no longer be able to access their doctors at all, it said.
Anthem's notice is misleading for consumers, who will likely assume that their coverage will remain substantially unchanged if they take no action, the lawsuit says.

Consumer Watchdog attorney Laura Antonini said at an Oct. 31 press conference that Reuters listened to by telephone, that about 500,000 families could be affected.

Like many plans being sold on ACA exchanges for 2017, premiums are also going up significantly, according to the lawsuit. Simon was told his premium would go up 33 percent, it said.

The lawsuit brings claims under California consumer protection law and under the ACA and associated federal regulations, which it says required Anthem to either extend customers' existing plans, or to tell them clearly that their plans were being canceled at least 90 days before Jan. 1, 2017.

The case is Simon v. Blue Cross of California et al, Superior Court of California, Los Angeles County, No. BC639205.

For plaintiff: Travis Corby of Shernoff Bidart Echeverria; Larry Flanagan and Laura Antonini of Consumer Watchdog
For Anthem: Kurt Peterson and Ken Smersfelt of Reed Smith