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Class-action lawsuit filed against Blue Shield

June 13, 2012 12:00:00 AM PDT
A class-action lawsuit has been filed against Blue Shield over the shutdown of health insurance plans. Customers who are dropped can sign up for a different Blue Shield plan, but it's not as good.

A rude surprise is what eye patient Deborah Goodwin says she got when she learned that her insurer Blue Shield was closing down her health plan and that she had to get an inferior replacement policy with less coverage but a higher deductible.

Goodwin is one of 300,000 Californians, Baby Boomers and older, who are joined in a class action lawsuit filed by Consumer Watchdog. Advocates constructed a flow chart that they say illustrates how Blue Shield skirts the law on insurance caps.

Blue Shield responded in a statement: "The allegations are false. We comply with all aspects of the block closure law and have since it was enacted."

"Blocks" are insurance plans. Consumer Watchdog says Blue Shield started a practice two years ago of closing "blocks" that cover aging patients. Coming on July 2, another round of closeouts: 23 plans will be eliminated.

Blue Shield does offer alternative plans for seniors in this situation, says Consumer Watchdog. Turns out though the policies are either more costly or they significantly reduce benefits.

As for switching carriers, that's more expensive or even impossible for patients with a pre-existing health condition.

Advocates want the court to block Blue Shield from closing policies on July 2. They also hope complaints stir state regulators to take a closer look at Blue Shield's practices.


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