Class Claims Blue Shield Overcharges

LOS ANGELES (CN) - Blue Shield charged California policyholders as much as three times the premiums allowed by state law, a class action claims in Superior Court. The named plaintiff claims she was overcharged by $1,400 a year for 3 years, and estimates the class contains more than 6,000 people.

Under the amended Knox-Keene Health Care Service Plan Act of 2000, California set a ceiling on how much health care insurers such as Blue Shield can charge under the Health Insurance Portability and Accountability Act.

The law states that "in no case shall the premium charged ... exceed ... the average premium paid by a subscriber of the Major Risk Medical Insurance Program who is of the same age and resides in the same geographic area as the federally eligible defined individual," according to the complaint.

Named plaintiff Amalia Corona Lample cites a Feb. 18, 2009 Los Angeles Times article that reported that Blue Shield "said it was not required to follow the state-issued rate structure because the company did not believe it was legally binding."

Lample disputes that. She claims Blue Shield charged her $4,376 more than the state allows for her premiums, from 2007 through 2009. She seeks restitution and punitive damages for breach of faith, unfair competition and violations of business law. Her lead counsel is William Larson with Kiesel Boucher Larson of Beverly Hills.

The defendant is California Physicians' Service dba Blue Shield of California.

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