Class Action Against Blue Shield For Wrongfully Miscalculating Health Insurance Deductibles
Scott Glovsky Files Action Against Blue Shield of California
On July 2, 2021, the Law Offices of Scott Glovsky filed a class action lawsuit against Blue Shield of California. The case relates to Blue Shield health insurance deductibles. It alleges that Blue Shield is wrongfully miscalculating the amount a subscriber must pay to meet his/her deductible for out-of-network services. The complaint alleges violations of Business & Professions Code Section 17200. It also alleges declaratory relief and breach of contract. Finally, the suit alleges breach of the implied covenant of good faith and fair dealing. What does this mean for members of Blue Shield? It means you may be spending more for health care services than you signed up for. If you are a Blue Shield member and purchase your insurance directly, you may be impacted. Contact the Law Offices of Scott Glovsky. We can evaluate your situation and potentially help.
What are Health Insurance Deductibles?
Most health insurance companies have deductibles. Deductibles are money you pay for health care services before your health insurer’s plan kicks in. Once you pay your deductible, you usually pay a “copayment” or “coinsurance” for services.
Your policy documents, often called an “Evidence of Coverage,” outline deductibles. Sometimes there are different deductibles for different services. For example, some plans have an “in network” and an “out-of-network” deductible. In network means the provider (doctor, hospital, etc.) is contracted with your insurance company to accept given rates. These rates are typically discounted rates. Out-of-network, then, means the provider is not contracted with your insurance company. Usually, your cost of services for in network providers is lower than your cost for out-of-network providers.
Other types of health insurance deductibles include those for prescription drugs and for mental health services. Also, plans for families may include deductibles for individuals and for the entire family.
What is Blue Shield Doing Wrong With Health Insurance Deductibles?
Blue Shield’s policy explicitly states that all amounts paid by our Plaintiff (class member) for covered services will be applied to the deductible. Blue Shield must be taken at its word as expressed in the Policy. The Policy consistently defines the Deductible as the amount a member pays for Covered Services and never qualifies that language with any exclusion based on the Allowable Amount.
The Policy further defines “a Calendar Year Deductible (CYD) as the amount a Member pays each Calendar Year before Blue Shield pays for Covered Services under the Plan. Another section of the plan is called, “Calendar Year Deductible explained.” It says, “a Deductible is the amount you pay each Calendar Year before Blue Shield pays for Covered Services under the Plan.” And a final section of the Policy says, “the Deductible is the amount you pay each Calendar Year for Covered Services before Blue Shield begins payment.”
None of the above definitions limit the Deductible in any way and do not state that only amounts up to the Allowable Amount will be applied. The contract language of the Policy explicitly states that any amount paid by the insured for Covered Services is a part of the Calendar Year Deductible.
By failing to give equal consideration to the interests of members in interpreting its contracts, the lawsuit alleges that Blue Shield has unreasonably withheld policy benefits. Moreover, the case asserts that Blue Shield’s practice of improperly calculating deductibles constitutes unfair competition in violation of California Business and Professions Code section 17200 et seq. (“17200”) because it is an unfair, unlawful, and fraudulent business practice.
The Plaintiff representing the class in this lawsuit paid and then submitted the amounts for out-of-network providers to Blue Shield. Then, Blue Shield only applied a partial amount of these costs towards the Plaintiff’s out-of-network deductible. The lawsuit contends that this is not permitted under the Blue Shield plan documents. It also alleges that Blue Shield’s conduct in misapplying the appropriate deductible amount breached the plan contract. And also that Blue Shield breached the implied covenant of good faith and fair dealing because it was an unreasonable withholding of policy benefits. The Plaintiff alleges that numerous other Californians who contract with Blue Shield on an individual and family basis were similarly harmed by Blue Shield’s conduct.
You can read the class action complaint here.
How Does This Impact You?
You may potentially be a part of this class. The lawsuit defines class members as:
- You are a resident of California;
- You are a member of any Blue Shield individual or family health plan or individual or family health insurance policy; and
- Blue Shield applied an amount less than the full amount incurred for out-of-network covered services to your out-of-network deductible
If you have any questions, please contact our offices.
About the Law Offices of Scott Glovsky
The Law Offices of Scott Glovsky has represented injured consumers and victims of wrongful business practices for more than the past two decades. We get justice for our clients and hold the wrongdoers accountable.
If you have an issue with your insurance company, please contact us and we can help.