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Life Health > Health Insurance > Life Insurance Strategies

Health Insurer Renegotiates Refund Payments

By Staff Writer

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A unit of WellPoint Inc. has persuaded officials in the Kentucky Office of Insurance to reduce the amount it must pay back to holders of Medicare supplement insurance policies.

Anthem Health Plans of Kentucky Inc., a subsidiary of WellPoint, Indianapolis, has settled with Kentucky regulators by agreeing to pay $1.25 million in refunds, or about $30 apiece, to 43,000 seniors and disabled holders of Anthem Medicare Select insurance policies, and by asking an affiliated foundation to give $1 million to health care charities and charities that help senior citizens, according to Kentucky insurance office officials.

In November 2005, regulators had imposed a $2 million fine and ordered Anthem to repay $23.7 million to policyholders.

“Anthem appealed the order, and today’s settlement resolves the matter,” officials say.

Kentucky regulators learned in late 2005 that Anthem had started making successful efforts in December 2004 to recoup excess payments it had made to health care providers, officials say.

Anthem failed to subtract the recoveries from the claim payment totals it used to justify some 2005 premium increases, officials say.

After the Kentucky insurance office issued its original order, Anthem showed that the problem affected fewer policyholders than regulators had believed and that the amount overpaid by policyholders was smaller than the insurance office’s preliminary investigation had suggested, officials say.

The Medicare Select policyholders affected by the settlement should get refund checks by the end of November, officials say.

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