Anthem To Settle Lawsuit, Limit Certain Health Plan Rate Hikes
To settle a class-action lawsuit, Anthem Blue Cross has agreed to limit rate hikes for about 122,000 policyholders whose plans were closed to new enrollees, the Los Angeles Times reports.
The settlement also would allow affected policyholders for the first time to switch plans without having their medical backgrounds reviewed.
Consumer Watchdog and affected policyholders filed the class-action suit after Anthem decided to close its individual "share" plans to new customers in September 2009.
The plaintiffs alleged that by closing the plans, Anthem forced existing enrollees to face steep rate hikes while failing to offer comparable coverage alternatives as mandated by state law. Advocates also contend that the closure trapped older and sicker policyholders in costly health plans.
If a judge grants final approval to the settlement in August, policyholders who keep their closed plans will not see their premiums increase by more than the average for all closed policies.
Jerry Flanagan, Consumer Watchdog's staff counsel, said the settlement could serve as a warning to other insurers seeking to close policies.
In a statement, Anthem said, "It is important to note that this settlement admits no wrongdoing on behalf of Anthem" (Helfand, Los Angeles Times, 6/21).
Anthem Halves Rate Hikes for Some Small Businesses
In related news, the state Department of Insurance recently announced that Anthem has agreed to reduce its proposed quarterly rate hike from 6% to 3% on average for some small businesses. DOI said Anthem's rate hike reduction stemmed from a review by state regulators.
Regulators said the increase will affect about 18,000 policyholders and will take effect July 1 (Rauber, San Francisco Business Times, 6/20).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.