Policyholders v CareFirst BlueCross BlueShield of Maryland
CareFirst of Maryland Charged With Prematurely Increasing Policyholder Premiums
A class action suit filed in Baltimore alleges that CareFirst BlueCross BlueShield of Maryland has overcharged policyholders millions of dollars by jumping the gun on premium increases permitted by their health insurance policies.
The lawsuit - brought on behalf of Richard B. Cort, a self-employed Columbia, MD resident, and all similarly-situated Marylanders - alleges that CareFirst uses a policy provision allowing it to increase premiums on certain policyholder birthdays (for example, when the oldest insured in a household turns 50-years-old), but does so on the first day of the month in which the birthday occurs.
"Even though Mr. Cort turned 50 on September 19, 2005 - moving him into the next age category - CareFirst prematurely billed him and his entire family at the higher premium dictated by his new age category beginning on September 1," explains the attorney that filed the lawsuit.
"That premature billing amounts to an overcharge for that month of $78.60 in Mr. Cort's case alone; it potentially amounts to millions of dollars when you consider how many people CareFirst insures and how most of those policyholders do not have birthdays that occur on the first day of the month," the attorney adds.
CareFirst's typical policyholder contract 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.
"CareFirst's failure to prorate the premium increase to provide policyholders with a lower premium rate for that portion of the month in which they have not yet moved from one age category to the next may amount to millions of dollars in the aggregate," says the lawyer.
The class action lawsuit seeks compensatory damages equal to all premiums or portions of premiums that have been prematurely increased within the past three years. The suit also seeks to enjoin CareFirst from increasing policyholder premiums prior to the birthday on which they move from one age group to the next.
