L.A. City Attorney Files $1B Suit Against Anthem Blue Cross
On Wednesday, Los Angeles City Attorney Rocky Delgadillo filed a $1 billion lawsuit against Anthem Blue Cross, the state's largest for-profit insurer, arguing that the company used illegal marketing and policy cancellation practices, the Los Angeles Times reports.
The lawsuit alleges that more than 500,000 people were duped into purchasing individual and family health care policies from Blue Cross. The suit also accuses Blue Cross and its parent company, WellPoint, of violating more than 25 state and federal laws (Girion, Los Angeles Times, 4/17).
Delgadillo filed the civil suit in Los Angeles County Superior Court, seeking damages of $2,500 for each violation, in addition to restitution (Orlov, Los Angeles Daily News, 4/16).
Delgadillo said that Blue Cross canceled more than 6,000 insurance policies and that the insurer "hides from consumers the fact that if the consumer requires an expensive medical procedure, there is a significant likelihood that Blue Cross will cancel their insurance policy" (Mohajer, AP/San Diego Union-Tribune, 4/17).
He added that he is taking action against Blue Cross independent of the state Department of Insurance as part of an ongoing review of insurance company practices (Los Angeles Daily News, 4/16).
Delgadillo filed a similar lawsuit against Health Net in February.
A spokesperson for Anthem Blue Cross disputed the allegations and said the company intended to fight the case.
WellPoint spokesperson Shannon Troughton said that the insurer's executives had wanted to discuss the allegation with Delgadillo before he took legal action but that his office declined the offer.
She said WellPoint is developing an outside third-party review process for all of its cancellation cases.
Meanwhile, Cindy Ehnes, the director of the Department of Managed Health Care, is expected today to announce the reinstatements of several individuals' health policies that were canceled by health plans, as well as a process to review and reconsider other canceled policies (Los Angeles Times, 4/17).
DMHC found that 90 cancellation complaints filed against Blue Cross were illegal, but the department did not initially require the insurer to reinstate any of the policies.
Lynne Randolph, spokesperson for DMHC, said the announcement will require reinstatements for people dropped by health plans other than Blue Cross. She added that the department also is completing its investigations of cancellation practices for four other insurers (Howard/York, Capitol Weekly, 4/16).