Calling it a classic “bait and switch,” a California consumer group on Tuesday lashed out at Anthem Blue Cross of California, accusing it of misrepresenting to its customers that the health insurer’s “renewal notice” for 2017 is actually railroading unassuming members into brand-new, bare-bones plans.
Santa Monica-based Consumer Watchdog announced it has filed a class action lawsuit against the health insurance giant, saying Anthem’s current Preferred Provider Organization plans — which cover a member’s in-network costs and a portion of their out-of-network costs — are being replaced by Exclusive Provider Organization plans, which cover no out-of-network costs.
The change, according to the group, is not immediately evident to individual members as they review their re-enrollment notices.
As a result, the non-profit group alleges, Anthem customers will potentially face thousands of dollars or more in medical bills that their existing plans covered.
Tuesday’s announcement of the lawsuit came on the first day of open enrollment for 2017 health care plans under the Affordable Care Act, also known as Obamacare.
Anthem spokesman Darrel Ng on Tuesday acknowledged that Anthem is moving its California Anthem PPO customers enrolled in 14 of 19 regions of the state’s health insurance exchange, called Covered California, to EPO plans.
Mostly, he said, that is due to increased use of medical services and added costs of drugs and medical therapies that “put upward pressure on rates.”
But he said the company believes the lawsuit is without merit.
“The benefit package being offered in 2017 was approved by the Department of Managed Health Care and Covered California, and is consistent with federal guidance,” said Ng.
Affected members, he said, have been mailed written notices about the change so they can make an informed decision on their health care needs during the open enrollment period for the coming year.
Anthem also previously announced an average premium increase of 17 percent for 2017 plans.
But attorneys at Consumer Watchdog say whether or not it got the okay from a state regulator, Anthem has violated both federal and state laws by breaching its insurance contracts with its 2016 members by failing to provide “guaranteed renewal” of existing coverage that is required under the contract.
The lawsuit seeks to require Anthem to renew the PPO health plans subject to the action for the 2017 calendar year, and demands reimbursement of money paid by consumers that will result from Anthem’s acts.