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Wednesday, May 18, 2022

Green Light for Blue Cross Age Suit

Green Light for Blue Cross Age Suit

By AMANDA BRONSTAD

Staff Reporter

A three-judge panel in the 2nd Appellate District has ruled Blue Cross of California must go to trial in a multi-million dollar breach of contract class action suit.

The case involves claims that Blue Cross, owned by Thousand Oaks-based WellPoint Health Networks Inc., breached its contracts with as many as 30,000 subscribers when it changed the age category on individual policies.

“People who buy health insurance expect things to change,” said Robert Gianelli, a partner at Gianelli & Morris representing the subscribers. “But if you break a promise that is over the life of the contract, that’s a different matter.”

Gianelli said the subscribers are seeking lost premium savings in the “tens of millions of dollars.”

Michael Chee, a spokesman for Blue Cross of California, downplayed the significance of the ruling, which also dismissed claims of fraud and negligent misrepresentation.

“We have concerns about the appellate court’s ruling and what information they’re basing their ruling on,” Chee said. “But other than that, they haven’t made any decisions. The case will move forward under trial now, that’s all it means.”

The dispute dates to 1994, when Blue Cross changed the age category on the individual health insurance policy of Los Angeles resident Deborah Kavruck, Gianelli said.

Kavruck, who is self-employed, originally purchased individual coverage 1984, when she was 39 years old and assumed the premiums would always be based on that age, Gianelli said. A decade later, Blue Cross adjusted her rates by changing her age category to 50, her age at the time. As a result, her premiums skyrocketed, Gianelli said.

Kavruck sued in 1996.

At the center of the argument is a provision of the Blue Cross contract that states, “We have the right to cancel (end your coverage) or modify this agreement, including change subscription charges, if we give you 30 days’ written notice.”

Kavruck believed that Blue Cross would make such changes only if she opted to change the type of her contract, the ruling says.

According to its Web site, Blue Cross of California has 1.6 million individual health insurance subscribers, which includes small businesses with 50 or fewer people.

Chee contends Blue Cross was within its rights to change the ages on the policies.

“These are people who were policyholders for a long time,” Chee said. “These frozen plans were rich in benefits. It’s like buying a 1964 automobile and then being given a 2004 model.”

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