business
Anthem Blue Cross of Calif. sued by former members
NEWS IN BRIEF — Posted April 19, 2010
WellPoint's California subsidiary is facing a putative class-action lawsuit alleging that the company illegally pushed members out of less-profitable blocks of business.
The plaintiffs claim that Anthem Blue Cross of California was using a "death spiral" strategy to shut down certain lines of business, raising rates until members were forced to switch to less generous coverage that was more profitable for Anthem.
Under state law, insurers who want to stop offering one type of plan must offer current enrollees coverage with comparable benefits and terms, and without underwriting that would exclude members with preexisting medical conditions.
The two former Anthem members named as plaintiffs filed the lawsuit March 1 with the help of Santa Monica, Calif.-based Consumer Watchdog. They claim that the company violated state law by pushing them in to new policies with poorer benefits and higher out-of-pocket costs.
Anthem spokeswoman Kristin Binns said the company, as of this article's deadline, was still working on a statement regarding the case.
Note: This item originally appeared at http://www.ama-assn.org/amednews/2010/04/19/bibf0419.htm.