Blue Cross Accused of Fraudulent Scheme in Cancellation of Health Insurance Policies

LOS ANGELES, Nov. 6, 2013 /PRNewswire/ -- Blue Cross was sued Monday in Los Angeles Superior Court in separate actions by two long-term policyholders who allege the health insurance giant induced them to switch from grandfathered policies in order to eventually cancel their health insurance.

"These clients had good policies before they were induced to switch by Blue Cross," said William Shernoff of Shernoff Bidart Echeverria Bentley LLP, the attorney for the plaintiffs. "Now they are facing higher premiums and their network of doctors has been drastically reduced. This looks like a concerted effort by Blue Cross to move long-term customers to newer policies so they could cancel them."

In one instance Paul Simon, a policyholder since 1997 who has suffered from severe illnesses since he was 3-years-old, was switched by Blue Cross in 2011 to a policy that he was later told was not covered by the "grandfather" clause. In another lawsuit, a 63-year-old woman who cares for her elderly mother was allegedly misled by Blue Cross to switch polices in 2011.

"President Obama said 'you can keep your old plan if you like it' so that's what we had planned on doing all along," said Patricia Mann, the mother of Paul Simon who manages his insurance matters. "I'm not blaming The President, I think the Affordable Care Act is a step in the right direction. I just don't think it is fair for Blue Cross to switch policies so they could cancel the policy."

Mr. Simon had been a customer of Blue Cross since 1997 and was switched in 2011 to a policy touted by the company as the "Cadillac" of plans. He alleges that he was never made aware of the repercussions of the ACA on the policy he was switched to and claims he was forced to make a decision without being given all the facts. Mr. Simon suffers from ulcerative colitis and melanoma, and alleged Blue Cross will switch him to a plan that could potentially not allow him to see his current doctors.

In the other lawsuit filed today, a 63-year-old woman who has been policyholder for over 25 years, alleges she began receiving correspondence from Anthem Blue Cross which she describes as both confusing and unclear regarding her policy. Blue Cross eventually pressured her to switch policies in 2011, which meant that she was no longer eligible to have her policy "grandfathered" in under the ACA. As a result of the policy change, her premium jumped from $289 on her old policy to $526 on the suggested policy. Blue Cross stated they would automatically force her into the more expensive policy by December 15, 2013 if she does not make an election herself.

"It's not the ACA that is requiring all of these cancellations, it's the insurance companies that have caused the problem," said Mr. Shernoff.

About Shernoff Bidart Echeverria Bentley LLP
Shernoff Bidart Echeverria Bentley LLP leads the nation in protecting policyholders from insurance company abuse. The firm has been protecting the rights of insurance consumers, both individuals and businesses, for over 35 years after having set the legal precedent requiring insurance companies to act in good faith.

SOURCE Shernoff Bidart Echeverria Bentley LLP