More Information on the Blue Cross Settlement

by Alan Mansfield on June 22, 2011

Anthem Blue Cross Settles Policy Closure Action

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Law360, New York (June 21, 2011) — Anthem Blue Cross has agreed to settle a class action in California state court from consumers who accused the insurer of closing certain coverage policies without providing them with legally required options and notices, a group representing policyholders announced Tuesday.

The nonprofit organization Consumer Watchdog said in a statement that the class action sought to block the WellPoint Inc. subsidiary from ensnaring its consumers in a so-called death spiral, a practice in which an insurer closes a certain health plan to new enrollees and raises the rates paid by those remaining until they can no longer afford it.

Death spirals force both new and current enrollees into plans with different and reduced benefits, though older insureds and those with pre-existing conditions can be trapped in the closed plan and stuck with escalating premiums, according to the group. The settlement allows California class members to move to new plans or take advantage of a rate cap.

“The settlement with Blue Cross is very positive news for consumers like my husband and myself who have been trapped in policies with spiraling rate increases. Now we will have the option to move to another policy without underwriting,” said Donna Freed, one of the plaintiffs in the suit, in a statement.

A Consumer Watchdog spokesman said Judge Fredrick H. Bysshe Jr. granted preliminary approval of the settlement in an order dated June 9, which the group received on Friday.

Blue Cross has denied all wrongdoing and agreed to settle to avoid further expenses and the risks of litigation, according to court documents.

A representative for the insurer did not immediately return a request for comment on Tuesday.

Named plaintiffs Randy Freed and Mary Feller had accused Blue Cross of unlawful, unfair and fraudulent business acts and practices in violation of the California Business and Professions Code as well as unjust enrichment.

Consumer Watchdog said California law requires health insurers in closing a policy to either offer consumers new comparable coverage or pool rates to minimize premium increases on the closed policy.

Under the settlement, insureds who stayed in the four closed health policies at issue in the case will see a cap on their rate increases, the group said.

Additionally, any who were enrolled in the closed plans, including those who switched to other Blue Cross coverage, can switch coverage without medical underwriting to any open policy regulated by the California Department of Managed Health Care as well as 12 additional policies regulated by the state’s Department of Insurance, according to the group.

Consumers will have the option to switch later this year and each of the next two years, said Consumer Watchdog, noting that the ability to transfer to new policies without medical underwriting means they can make that switch regardless of medical condition or health history.

The benefits under the settlement will be in place until the end of 2013, after which the “guaranteed issue” provisions of the federal health care reform law are expected to be fully implemented, according to the group.

A hearing on the settlement’s final approval is slated for Aug. 26.

The plaintiffs are represented by Alan M. Mansfield of the Consumer Law Group, Harvey Rosenfield, Pamela Pressley and Jerry Flanagan of Consumer Watchdog, Edith M. Kallas and Adam P. Plant of Whatley Drake & Kallas LLC, and Antony Stuart of the Stuart Law Firm.

Blue Cross is represented by Kurt C. Peterson, Kenneth N. Smersfelt and Amir Shlesinger of Reed Smith LLP.

The case is Feller et al. v. Anthem Blue Cross of Calif. et al., case number 56-2010, in the Superior Court of California, County of Ventura.

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{ 26 comments… read them below or add one }

jalal karimi October 27, 2011 at 11:01 am

Good luck winning anything from these bastards. It is oximoran to have health insurance. What is their business between Drs and patient/ They should outlawed. Only if we had democracy and we could elect somebody who could represent us. All poletician are bought and paid for even our media bought and paid for

Aleks Totic October 30, 2011 at 11:37 am

I’ve just received Anthem’s offer as part of the settlement. Is there anything obvious in this offer that I should take advantage of? The settlement does not provide much guidance, and I do not trust Anthem’s documents.

I’ve been with Anthem for 10 years, enrolled in PPO 2500. I am 45, self-insured, and pay $500/mo. I buy insurance to get hospital discounts, and protect myself in case of catastrophic bills. I expect to pay for most regular visits myself. I was thinking of switching to PPO7500.

Alan Mansfield October 31, 2011 at 11:47 am

For those who have such questions, Anthem has set up a phone group to deal with questions about what class members’ options are and what are the respective costs. That is the phone number listed on the letter you received. If you have a problem getting through to that phone number, let us now and we will help you get a prompt response. We would like to know if consumers are having a difficult time getting ahold of Anthem representatives, as part of our resolution was to attempt to ensure consumers did not have to wait long periods to get a response. If you do not get a satisfactory answer to your question, please contact one of the Class counsel directly, or go to While a number of factors may play into whether you should switch plans without medical underwriting at this time, one of us can explain what the options made available under the settlement mean.

Lauren radack June 4, 2012 at 2:46 pm

I can’t get through by phone to anthem blue cross. They finally picked up after waiting almost 30 minutes, and when I mentioned the Feller settlement the phone got disconnected.

Alan Mansfield June 7, 2012 at 9:10 am

There will be more information being sent out by Blue Cross shortly, but will pass your comment on to them. Consumer Watchdog is also a good resource to directly interact with Blue Cross. Hope this helps

Alan Mansfield June 11, 2012 at 11:35 am

Lauren, Blue Cross looked into this question. there is a telephone number provided in the change letter, and persons calling in to discuss this settlement should use the number in that letter to get direct service rather than the more general information number. In addition, they also looked into the long hold times and dropped call issue and indicated those matters have been addressed. If you continue to have issues let us know.

Sara Shaw January 3, 2013 at 4:19 pm

I received the Anthem settlement letter in December. I was on hold this morning for 40 minutes, and then talked to an adviser who was extremely unhelpful, basically tried to scare me into staying in my grandfathered closed plan, did not mention rate caps that are part of Feller, did not help me review options. I am now trying to call back to the direct service number with more questions but the wait is equally long. Anthem is making it extremely difficult to get any information at all!

admin January 4, 2013 at 12:10 pm

This is not a complaint we have received before, but will investigate. If others have had a similar experience recently, feel free to post your experiences. If you have a similar experience after trying again, please contact me directly. Thank you for keeping the public informed about your experience, though I am sorry this happened.

Debra January 4, 2013 at 3:58 pm

I have tried since 8 this morning to get through to Anthem about policy changes. Wait 43min…37min..24min and no answer. When I finally did get through after the last 37min wait to ask about a policy change due to my Grandfathered/ feller v Athem..they hung up on me. Not happy !!!

admin January 4, 2013 at 4:48 pm

thank you for your comments. We will be in touch with Blue Cross about this.

lori January 11, 2013 at 5:10 am

I too called in and used numer per form. At least 30 min wait. When someone answered he said how can I help you and then said let me tansfer you which put me back to last in queue. Finally I did get through. Person did provide rates but cautioned me about switching and recommended I stay where I was or maybe switching to another plan with grandfather status but those premiums were too high . Told me all other plans would go to exchange plans and premiums in exchange would be very expensive. After I did a lot of research and read the actual law to understand and for me decided it was best to change.

Ted Weinstein January 23, 2013 at 4:21 pm

Alan, same experience as above – long wait times on hold, have NOT ever reached a human being.

Ted Weinstein January 23, 2013 at 4:38 pm

I waited 40 minutes on hold at the number given for reaching a “Health Plan Advisor” – 866-524-5660. The woman who answered asked what I was calling for. I told her it was to get rates for various plans. She said “OK, you need to speak with a Health Plan Advisor” and put me back on hold, with the exact same hold recording. I have now been waiting for an additional 20 minutes. One hour total, and still haven’t reached a “Health Plan Advisor” to get simple information on rates for various policy/plan options. This is unacceptable yet seems to be the common experience. What can be done?

admin January 23, 2013 at 4:43 pm

For all who have posted on this issue, We will be speaking with representatives of Blue Cross this week to advise them of your concerns and to see what can be done to address them, and will report back to you all.

Sheri January 24, 2013 at 4:24 pm

On hold for over 45 minutes, finally reach agent, extremely rude. After the unpleasant conversation, she stated I needed to fill out the change form that came in the mail. I stated that I had been caring for my terminally-ill father, and he recently passed. During this stressful time I was in the process of moving and miss placed the form. She stated without the change form, I would have to go through the medical-underwriting process. Is there anyway I could get the change form from the class action settlement? I only have until 1/31/13. Thank you for all you do! Sincerely, Sheri

admin January 25, 2013 at 11:10 am

Sheri, on your specific question, if they have your name and policy number they should send you an updated form ASAP. But we will check.

admin January 25, 2013 at 11:28 am

For those who have posted, thanks for your comments. First, if you have misplaced your form, if you have not previously changed, call and ask them to fax you the form. If they won’t do so, call me. The form is important for them for tracking purposes, but is replaceable. Second, we have shared your concerns with Blue Cross and they are looking into the wait time and disconnection issue, getting information on rates or premiums, and the information about the currently open plans grandfathered plans and their options, and how it impacts clients. Once we get more information will let you know.

Sheri January 27, 2013 at 11:52 am

Thank you for the response. I attempted twice on Saturday to speak to an agent. Was disconnected after a very long wait time. When I originally spoke to an agent, she stated without the form I received, unfortunately they could not help me. I will try again on Monday, to request a faxed copy. If this is not possible, I will definitely contact you.
Sincerely, Sheri

Sheri January 27, 2013 at 12:25 pm

FYI, for Blue Cross consumers: The Benefits agent really tries to attempt a hard-sell on keeping your “grandfathered status”. Stating that when the Affordable Care Act goes into affect, unless you are “low income” (mentioned many times) your rates could be very high and if you change you will be subjected to the new rules under the ACA. I have an individual plan, I am 43, pay $818/month with 30% co-fees. With all the stipulations on what counts towards your deductible, I have a 500, I rarely ever met it until November each year. When I inquired about the different plans available with a previous agent at the beginning of January, he only gave me grandfathered plans. After much research, when I called on 1/23/13, again back to only grandfathered plans. It was not until I asked for other open plans options did I finally get the details. The agent stated since the premiums seemed to be my issue, she would suggest moving to their Premium Plus 5000. The premium would be $222/month. Once again she kept referring to are you low income? Once again, not a great customer service experience from Blue Cross. Sheri

Sheri January 28, 2013 at 4:04 pm

Update: Blue Cross member services, where very helpful, and e-mailed me the Feller Settlement Change Form this afternoon. Again many thanks for all the information. Sheri

Carla January 30, 2013 at 1:02 pm

What are the pros and cons of remaining on a ‘grandfathered status plan/plan’ vs an ‘open new plan/policy’ (not grandfathered) subject to ACA’s rules in 2014?

Steve January 30, 2013 at 2:14 pm

I appreciate the comments and Alan’s responses and was curious if anyone has found a concise, non-Anthem, source of info weighing the pros & cons of leaving a grandfathered plan? Or if anyone has a similar situation and cares to comment? Male, non-smoker, ongoing cancer condition, 50 years, paying $1,086 per month on the PPO Share 500. Thanks Much!

Steve January 30, 2013 at 3:32 pm

Just spoke with Bruce @ Anthem after a 27 minute wait. Very helpful as we went through the different options. He was not trying to sway me one way or the other.
One item of note was his comment that I could shift over to a Grandfathered plan (as well as the PPO Share 3500/5000/7500) at any time, even after the Feller deadline 2/1/2013. I haven’t read that fact anywhere else?

admin January 30, 2013 at 6:25 pm

Question for all who have posted – were you, or do you know, if you were in grandfathered plans? That may be the root of the issue. You can send me an email if you would prefer. We are asking Blue Cross to get out clearer information on what a grandfathered plan is and what it means to be in one as far as your options are concerned. Also, they are working on the wait time issue now and think we have come up with a solution. If you talk to a representative, tell them first thing you are a Feller-Freed class member to ensure priority. Finally, if you are still having issues getting premium information, send me an email so can follow up with Blue Cross about this. Thanks for all the posts — they were very helpful in communicating these concerns to Blue Cross.

Carla January 30, 2013 at 7:54 pm

Yes, I am in a grandfathered plan and can change to another grandfathered plan or to a non-grandfathered plan.
Want to know the consequences, for remaining on a grandfathered plan vs. switching to a non-grandfathered plan.

jan January 31, 2013 at 11:40 am

I am in a grandfathered plan and can change to another grandfathered plan or switch to a non-grandfathered plan. I have to make a decision and let them know by mail tomorrow. I have been trying to reach Blue cross on the special phone # they sent on paperwork. I have tried three days in a row. Each time waiting on hold for at least an hour. I need info so I called the other more general BC # and the agent said I am not a Health Plan Advisor can’t give you the info you need. What am I to do, I need to lower my rates as they have just upped my cost 12.5%. How do I get info if no one answers the phone!!!!!Thank you for your help.

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