Anthem Blue Cross Will Repay $8.3 Million to 50,000 California Customers

Anthem Blue Cross has settled a class action lawsuit to refund $8.3 million to tens of thousands of its members and has agreed to forgo mid-year changes to the deductible and out-of-pocket limits on its members' annual plans.

Anthem, California's second largest insurer, had raised annual deductibles, prescription drug deductibles and out-of-pocket limits for about 50,000 customers in mid-year in 2011, prompting two lawsuits alleging breach of contract.

One of those who sued was Eric Taub of Westlake Village. In 2011, he and his wife were paying Anthem a combined premium of about $2,400 each month and had individual deductibles of $1,500.

With the mid-year change, Taub and his wife saw their deductibles rise to $1,750.

"It's like you're playing a game and you think you're at the goal, and they move the goal post another 10 yards," says Taub.

Anthem argued that its contracts allowed for mid-year increases, as long as it provided proper notice of the changes.

Taub's suit and another case were combined into one class action. After extensive negotiations, the two sides agreed to settle. Anthem agreed to no longer make mid-year alterations to individual customers' plans, unless a change in law or regulation supports such modifications. As part of the deal, Anthem does not admit to wrongdoing.

"Anthem should be commended for listening to the heartfelt concerns of its policyholders," Jerry Flanagan, lead attorney for plaintiffs' co-counsel Consumer Watchdog, said in a statement. "This settlement gives consumers the peace-of-mind of knowing that their 'annual' out-of-pocket costs won't change in the middle of the year."

Anthem issued a statement saying it "is pleased that all parties were able to come to an agreement."

The Anthem members who saw their costs rise due to the 2011 plan changes do not need to file a claim to receive their part of the $8.3 million refund. Checks will be mailed to them in December, according to Consumer Watchdog.

The settlement is tentative pending Los Angeles County Superior Court Judge Jane Johnson's final approval.