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Paul Kiesel
Paul Kiesel
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LA Times: Blue Shield of California Insurance Holders Owed Thousands of Dollars

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In 1996, the federal Health Insurance Portability and Accountability Act (HIPPA) was established to ensure that people who lost their jobs were able to remain insured.

Under HIPPA, insurers must offer their most popular coverage options to people whose COBRA coverage has run out. COBRA (which stands for Consolidated Omnibus Budget Reconciliation Act, 1986) was created to extend job-based group insurance coverage for up to three years after leaving or losing a job, however, completely at the individual’s expense.

Basically, in California, HIPPA is supposed to keep insurers from hiking up premiums to unaffordable rates (especially after losing COBRA coverage) for the state’s sick and jobless. Anthem Blue Cross and Blue Shield of California had other ideas.

Both companies have chosen not to adhere to the state-issued rates and have been charging insurance holders up to 55% more than they should have been charged.

Anthem has been made aware of what a spokeswoman said was “an error,” but Blue Shield doesn’t think it’s done anything wrong and will continue to charge its policy holders because Blue Shield doesn’t think the state-issued rate is legally binding. But they’re wrong and they owe as many as 6,000 policy holders thousands of dollars from over-charged premium payments, since at least 2006.

Los Angeles Times article here.