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Early retirement leads to insurance issues for some

Individuals who have certain Blue Shield of California plans are reportedly filing a class action lawsuit against the company. The class alleges that Blue Shield’s process collects premiums for insurance plans that don’t actually provide any benefits should a person retire before the age of 65 and qualify for Medicare because of a disability.

The problem seems to arise from the process for transitioning people out of regular Blue Shield insurance and to a Medicare supplement policy. According to reports, the process is well documented and works for those who retire at age 65. The insurance provider has processes in place that begins notifying individuals of the need to transition as they near retirement age.

Those who retire before that age because of a disability don’t get the benefit of such communications. One man reports that he retired early because he had cancer. Because of his illness, he was able to get Medicare coverage, but Blue Shield continued to accept payments for basic insurance coverage. That coverage is much more expensive than the premiums for a Medicare supplemental policy.

According to the lawsuit, the man says Blue Shield has collected these premiums for nine years and it has failed to correct the issue or refund the premiums. Meanwhile, since Blue Shield’s policy is that it will not cover claims if Medicare is in effect, the insurance being paid for is virtually useless.

Reports indicate that the class is up to around 1,000 people at this point. The insurance provider has not yet been served with a suit, and the plaintiffs appear to be seeking certification at this time. The lawsuit reportedly seeks both a refund of the paid premiums and damages for what the suit calls unfair competition.

This case illustrates how complex insurance can be. Something as simple as transitioning coverage doesn’t always work how it’s supposed to, so it’s no surprise claims processes don’t always work. If you are dealing with insurance issues in California, including denial of your claims, working with a legal professional can help.

Source: Courthouse News Service, “Class Says They Paid Blue Shield for Nothing,” Jonny Bonner, May 05, 2016

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