Cigna, Blue Shield sued for misrepresenting coverage

A Santa Monica-based advocacy organization filed two separate class-action lawsuits against Blue Shield and Cigna, claiming the health insurance companies misrepresented their coverage in order to make a larger profit.

The lawsuits, filed by Consumer Watchdog of Santa Monica, alleges the two insurance companies delayed enrollment in Affordable Care Act plans, violating state law and misrepresenting doctor and hospital networks to boost sales during Covered California's open enrollment, which ended on March 31.

"Cigna and Blue Shield of California have pulled off a blatant bait-and-switch," said Jerry Flanagan, an attorney for Consumer Watchdog.

The suit alleges Cigna, which was not part of the Covered California exchange, sold its plans as under Covered California. The company allegedly also switched the doctors for some of their individual clients to out-of-network status, and left many customers holding the bill for their doctor's services.

Sheila Davidson, a Cigna consumer from Orange County who is chronically ill, was one of the customers impacted by the change.

"When I chose to switch my health insurance to Cigna during last year's open enrollment period, the single most important factor was to be able to continue care with the same team of physicians that have been treating my serious medical conditions for years," she said.

"All of a sudden the coverage for all of my treatment, all of my doctors had been pulled out from under me. I no longer had coverage from anybody who had been treating me for years," Davidson added.

The suit against Blue Shield, which is part of the Covered California exchange, alleges the company not only misrepresented its doctors and providers, but also failed to provide their buyers of individual health coverage with proof of insurance for two to three months or more.

"They couldn't use their coverage. They couldn't go to the doctor. Or they went to the doctor and had to pay out of pocket," said Laura Antonini, an attorney for Consumer Watchdog.

Blue Shield acknowledged receiving the lawsuit, but did not elaborate. Cigna declined to comment pending the lawsuit.

Consumer Watchdog says Blue Shield has about 400,000 insured in the California while Cigna has about 10,000 insured. The organization is seeking restitution and damages, and wants the two companies to stop the conduct they have alleged in the lawsuits.