Division of Insurance orders Anthem to Refund Nearly $1.3M to Colorado Consumers

Division of Insurance orders Anthem to Refund Nearly $1.3M to Colorado Consumers.

Company overcharged consumers for Medicare Supplement policies; Coloradans may be eligible for refunds and reinstatement of policies.

Thomas W. Henderson, a shareholder with Burg Simpson, commented on the recent order mandated by the Colorado Department of Regulatory Agencies Division of Insurance:

“In an unusual move, the Colorado Division of Insurance just ordered Anthem Blue Cross and Blue Shield to refund nearly $1.3 million to Colorado consumers who purchased Medicare Supplement coverage and to reinstate coverage for those consumers who gave up their Medicare Supplement policies.  The Division found Anthem had charged consumers inflated rates since about 2006.  As an attorney that focuses his practice on representing consumers against insurance companies, it is nice to see the Division of Insurance take action that truly benefits consumers wronged by the insurance industry.”

The Colorado Division of Insurance

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.

The DOI recently concluded a market conduct surveillance 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 that Anthem has charged these inflated rates since approximately 2006.

Anthem Refunds

Anthem will notify the approximately 219 impacted individuals about the refunds and the offer to reinstate coverage. Thus, it is important for anyone who was in this situation or had a family member in this situation, to pay attention to their mail in the coming weeks. Notifications will be sent soon, and separate checks for the refunds and for interest will be mailed by Anthem within 30 business days of July 3, 2019, the date when the order was signed by Insurance Commissioner Michael Conway.

Those who are eligible for these refunds are 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. 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.

Current and former Anthem Colorado Medicare Supplement policyholders may contact Anthem at the company’s Colorado Medicare Supplement member service toll-free number, 1-844-660-0434, for help in determining who may or may not be eligible for refunds and reinstatement.

In addition to paying this restitution to Colorado consumers, Anthem is being fined $100,000 by the DOI with a portion potentially waived if the company follows the order by contacting impacted consumers, refunding the overcharged premium and reinstating eligible individuals.

Thomas W. Henderson is a shareholder at Burg Simpson Eldredge Hersh & Jardine and focuses his practice on representing policyholders in suing insurance companies for bad faith and getting insurance companies to pay what the insurance policy promises to pay. Tom spent the first 20 years of his practice representing the insurance companies, answering their questions about whether the policy provided coverage for various claims, and even defending them when they were sued.

Tom uses this unusual background to his clients’ advantage because he knows where the weak spots are, where the smoking guns are hidden and how best to structure his clients’ cases to maximize the potential of getting the insurance companies to pay. Tom represents both individual consumers and businesses in their pursuit of insurance claims. For consumers, this includes auto, uninsured and underinsured motorist, homeowners, renters, liability, property, health, disability, and life insurance claims. For businesses, this includes auto, liability, property, lost profits, directors and officers, professional liability, and construction insurance claims. These claims can range from a few thousand dollars to millions of dollars.