The Colorado Division of Insurance (“DOI”), part of the Department of Regulatory Agencies (“DORA”), has ordered Anthem Blue Cross and Blue Shield to refund $1.29 million to disabled Colorado consumers who purchased a Medicare Supplement plan before turning age 65.
In addition, Anthem will reinstate coverage for these consumers who gave up their Anthem Medicare Supplement policies.
In a statement, the DOI said that it recently concluded a market conduct surveillance (similar to an audit) of Anthem, officially known in Colorado as Rocky Mountain Hospital and Medical Service, Inc., regarding the Colorado Medicare Supplement premiums charged to disabled members. These policyholders were not offered the appropriate premium rate after turning 65, as the company continued to use the more expensive under-65 premiums for some disabled individuals, the DOI found. The DOI determined that Anthem had charged these inflated rates since approximately 2006.
The DOI added that Anthem will notify the approximately 219 impacted individuals about the refunds and the offer to reinstate coverage.
Disabled consumers who, during any time period from 2006 through 2019, were enrolled in an Anthem Colorado Medicare Supplement policy prior to turning age 65 and then retained that policy for some time after turning 65 are eligible for the refunds. Anthem will pay a refund, plus interest, to these policyholders (or the estate of a policyholder) for the difference between the two premiums for the time period when the smaller premium should have been collected.
The company also will offer to reinstate eligible individuals who were in this situation but who have subsequently given up their Anthem Colorado Medicare Supplement policy. Although some of the individuals who gave up their Anthem policy may have found a supplement policy with another company, many may have been unable to do so because of their disability, the DOI said. The ability to get back onto their original Anthem plan at the correct premium will be a welcome option to those individuals who have no coverage or different coverage as a result of the increased premiums, the DOI added.
This reinstatement will be guaranteed issue, meaning that a person will not have to offer proof of his or her health (also called medical underwriting). If the person has purchased another supplement plan with a different company, the reinstatement will have to match the same letter policy as the person’s current coverage (e.g., if the current coverage was Plan F, then the reinstated policy with Anthem will be a Plan F).
In addition to paying this restitution to Colorado consumers, Anthem was fined $100,000 by the DOI with a portion potentially waived if the company followed the order by contacting impacted consumers, refunding the overcharged premium, and reinstating eligible individuals.
Learn more: The Order.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].