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.
DENVER (July 11, 2019) – 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 (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 that Anthem has charged these inflated rates since approximately 2006.
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.
“This is a welcome result for Colorado’s disabled Medicare population,” said Sharon O’Hara from the Colorado Chronic Care Collaborative. “It demonstrates that the Division of Insurance continues to work to protect citizens and get money and health coverage back for people who often can’t afford to lose either.”
Who is eligible for these refunds? It is 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.
The company will also 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 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.
This reinstatement will be guaranteed issue, meaning that a person will not have to offer proof of their 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).
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.
“This is an unfortunate situation,” said Commissioner Conway. “But through the work of our team at the Division, these consumers will get money back in their pockets, money they shouldn’t have had to pay in the first place.
“It’s also important to point out that we discovered this due to a consumer’s complaint,” added the Commissioner. “We always encourage anyone who has questions or concerns about their insurance to contact us. We not only address the individual issues, but compile them to see if there are larger problems that need to be investigated.”
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.
The Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA) regulates the insurance industry and assists consumers and other stakeholders with insurance issues. Visit dora.colorado.gov/insurance for more information or call 303-894-7499 / toll free 800-930-3745.
DORA is dedicated to preserving the integrity of the marketplace and is committed to promoting a fair and competitive business environment in Colorado. Consumer protection is our mission. Visit dora.colorado.gov for more information or call 303-894-7855 / toll free 1-800-886-7675.