Humana sued for keeping policy in place

(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.