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Life Health > Health Insurance > Your Practice

Policyholders Sue Over Rate Increase Timing

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Lawyers are trying to organize a class-action lawsuit against a Maryland health carrier in connection with the way the carrier has handled policyholders’ birthday anniversaries.

The lawyers have filed the suit, Cort vs. CareFirst, in a state court in Baltimore and named Richard Cort of Columbia, Md., as the lead plaintiff.

CareFirst BlueCross, a unit of CareFirst Inc., Owings Mills, Md., uses an individual health insurance contract that allows for a rate increase when the oldest insured individual in a household turns the ages of 1, 6, 18, 30, 40, 50, or 60, according to Andrew Levy, a partner at Brown, Goldstein & Levy L.L.P., who is helping to represent Cort.

Maryland insurance regulators say they believe the company has been increasing premiums for individual health insurance policyholders on the first day of the month in which the birthday anniversary occurs, rather than on the birthday anniversary.

CareFirst BlueCross increased Cort’s premiums Sept. 1, 2005, even though Cort did not turn 50 and cross into a new age category until Sept. 18, 2005, Levey says.

The early category change increased Cort’s costs by $78.60, Levey estimates.

CareFirst BlueCross has sent Maryland insurance regulators a letter saying it will clarify its contract and send refunds to policyholders affected by the birthday anniversary problem.

CareFirst has declined to comment on the Cort suit.

“CareFirst does not comment on pending litigation,” a company spokesman says.


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