(Bloomberg) — Humana Inc. (NYSE:HUM) was sued by a Missouri man who claimed the insurer raised premiums for him and other customers and then failed to respond to requests to cancel policies.
The man claimed the company kept the policies in place to increase revenue under the Patient Protectio and Affordable Care Act (PPACA).
Hundreds of thousands of people received policy cancellation letters from insurers because their plans failed to meet PPACA requirements that took effect Jan. 1.
The Obama administration in November gave regulators and insurers the option of keeping non-compliant policies in place, but it told the companies involved to tell consumers how the non-compliant policies conflict with the new PPACA requirements.
Daniel Doyle of Missouri claims he sought to cancel his Humana health insurance policy after the company told him in August it was being replaced with one with a higher monthly premium. Erik Dirks, a lawyer for Doyle, said he believed the complaint, which was filed Jan. 21 in the U.S. District Court in Kansas City, Mo., was the first of its kind against an insurer.
“Humana continued to take automatic deductions from policyholders’ accounts and/or Social Security checks and/or Humana invoiced policyholders for alleged ‘past due’ premiums,” according to the complaint. Doyle seeks to represent Humana policyholders in 22 states who were unable to cancel policies.
A representative of Humana, based in Louisville, Ky., didn’t respond to a voice-mail message left with the company’s media office after regular business hours yesterday seeking comment on the lawsuit.
Doyle seeks a court order declaring Humana’s practices violated consumer protection laws and forcing it to disgorge profit from the practice.
He said in his complaint that Humana didn’t respond to his faxes or calls to an automated phone system seeking to cancel the replacement policy. A Humana representative reached by phone in January didn’t have the authority to cancel the policy, according to the complaint.
The case is Doyle v. Humana Inc., 14-00061, U.S. District Court, Western District of Missouri (Kansas City).
–With assistance from Roger Runningen and Lisa Lerer in Washington. Editors: Michael Hytha, Peter Blumberg
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