Along with the changes and new costs coming with health reform, past problems are cropping up for some insurers, even setting regulatory records.
Anthem Blue Cross and Blue Shield of Missouri's Healthy Alliance Life Insurance Company and HMO Missouri are set to pay back $7.8 million to hundreds of customers in greater St. Louis, in what John Huff, director of the Department of Insurance, calls the state's largest settlement ever to stem from an insurance market conduct examination.
"Part of our mission of consumer protection is to ensure that consumers are fully informed about their insurance coverage options when they buy insurance," Huff said. "Missourians should know the department will remain vigilant and utilize all of its regulatory authority when companies fail to do that."
Throughout the 2000s, Anthem's Health Alliance company sold two types of plans in Missouri, Alliance plans and Alliance Choice plans. The plans had cheaper premiums, a narrower provider network and benefits and were sold in only part of the service area.
In 2007, at the same time a new claims system was brought on, these members and groups were converted into Blue Access and Blue Access Choice plans, with an expanded service area for Choice members -- and a bit of a benefit and network shake up that resulted in some consumers paying more than others for the same benefit levels, the Department alleged in a market conduct investigation.
Around that same time, across the expanded service area, "the 'Blue Access' individual health benefit plans became identical in benefits and substantially with respect to providers to 'Blue Access Choice,'" wrote the Department's Division of Insurance Market Regulation. But the "premium differential" continued, regulators alleged, leaving some of the original Alliance members paying higher premiums for a narrowed benefit and provider tier, according to the investigation.
The company, they wrote in the allegations, "failed to fully inform individual members with the 'Blue Access' health benefit plans who resided in the 2007 Choice Service Area or the subsequent Expanded Choice Service area of the substantially equivalent 'Blue Access Choice' health benefit plans."
According to the settlement, Anthem's Healthy Alliance will create a $7.8 million fund to give refunds to individual members of the Alliance plans who lived in the Choice plan service area who were converted to the Blue Access plan. The insurer is set to contact customers, and an 1-800 number has been created for individuals to reach out.
Huff, a former Swiss Re and GE Insurance Solutions executive, noted that Missouri is the only state where health insurers do not have to file premiums with state insurance regulators -- something he argued could " proactively prevent consumers from being charged health insurance rates that are excessive, inadequate or unfairly discriminatory."
Still, he pointed out, with the $7.8 million Anthem settlement, since 2009 Missouri insurance regulators have recovered $33 million in consumer restitution and fines through market conduct investigations.