Insurance Companies Accused Of Bait And Switch

Published on

Sept. 25–WESTLAKE VILLAGE, Calif. — After claiming he paid way more for insurance that delivered way less and waited on hold for hours to complain, Kevin McCarthy said he needed a way to get Blue Shield of California's attention.

So he sued them.

The Westlake Village resident and his wife, Jane, are among the lead plaintiffs in one of two lawsuits against insurance companies announced Thursday by the Consumer Watchdog organization.

The suits against Blue Shield and Cigna allege the insurers played bait and switch with customers in individual and family plans by telling them doctors and hospitals were covered in network when they were not.

"That means Blue Shield or Cigna either won't pay for the coverage at all or pay far less," said Jerry Flanagan, a lead staff attorney with Consumer Watchdog. Consumer advocates said the insurers were trying to boost their membership during the six-month open enrollment triggered by the Affordable Care Act.

Lawyers want the lawsuits to be certified as class action litigation. They said as many as 410,000 consumers could be involved, including Californians who signed up for individual insurance with the two companies during the enrollment that started on Oct. 1, 2013.

A Cigna representative declined comment on the lawsuit. A Blue Shield of California spokesman acknowledged the suit has been filed.

"We will review the complaint and may have more to say at a later time," said Sean Barry, corporate communications manager for Blue Shield of California.

The lawsuit presses one of many hot buttons created by federal health reform. Patients and doctors have complained for months about the size of provider networks and confusion over who is and isn't covered.

In July, Consumer Watchdog filed a lawsuit against Blue Cross, alleging misrepresentation of doctor and hospital networks.

The lawsuits against Cigna and Blue Shield center on consumers who wanted to make sure their doctors were covered in-network before enrolling in new plans.

McCarthy is 57 and self employed. He and his wife had been covered by Aetna but learned their policies were being canceled.

Before paying $300-plus more in monthly premiums for a silver enhanced plan with Blue Shield, they checked the company's website and saw their primary doctors were listed as in-network, according to the lawsuit.

They said the doctors also confirmed they would accept the new coverage.

Only after McCarthy received a notice showing the insurer would pay only $16.46 of $100 in charges did he learn his doctor was out-of-network, the lawsuit said.

His wife's doctor wasn't covered either, he said, adding the change in status has cost them several hundred dollars, maybe more.

"I am upset … after all the calls we made to Blue Shield, the hours — the hours — we spent on hold," he said. "Every time we reached someone on the other end, we got mixed answers."

The lawsuit alleges long telephone hold times were common and violate a state regulation requiring that waiting not exceed 10 minutes.

The lawsuit also alleges Blue Shield didn't provide many customers with proof of insurance for two to three months, preventing them from using their coverage or forcing them to pay out-of-pocket.

Plaintiffs are asking the insurers to increase their networks of doctors and hospitals. In Ventura County, Blue Shield's network for people covered by individual and family plan doesn't include Los Robles Hospital & Medical Center in Thousand Oaks or Community Memorial Hospital in Ventura.

Lawyers said they also want Blue Shield's telephone wait times reduced. They're asking for plaintiffs to be reimbursed for their out-of-network costs and also to be paid damages.

McCarthy thinks his story and the lawsuit reveals the lack of power of people who aren't insured by employers and rely on the individual and family market.

"We're the 5 percent who got left out and had to fend for ourselves," he said.

Latest Videos

Latest Releases

In The News

Latest Report

Support Consumer Watchdog

Subscribe to our newsletter

To be updated with all the latest news, press releases and special reports.

More Releases