Humana sued over consumer troubles cancelling policy

Humana is being sued by an individual policyholder claiming he has been unable to cancel the plan despite months of trying, in what may be first such lawsuit over insurance company practices during the transition to ACA-compliant health plans.

Daniel Doyle, a Missouri resident living in greater Kansas City, bought a Humana One individual health plan, with monthly premiums of $229, that took effect in December 2012, about a year before many policies were set to be phased out under the Affordable Care Act.

When he found a new plan a year later, he was unable to cancel the Humana policy and has been trying to recoup several months worth of premiums ever since, according to a lawsuit filed on his behalf seeking damages, a prohibition on alleged cancellation request-dodging and corrective action for any consumers similarly affected..

In August 2013, nine months after Doyle purchased plan, Humana sent him a letter saying his policy would expire at the end of the year and be replaced with a new, Affordable Care Act-complaint plan with a higher monthly premium of $395.

The lawsuit, filed by Kansas City attorney Eric Dirks in the federal court of western Missouri, contends that the letter contained several errors presaging problems his clients would face: that Humana was required to cancel the policy under Missouri law, that the Missouri Department of Insurance had approved health insurance rates, and that the current and new ACA-compliant benefits were "incorrectly listed."

By November of last year, Doyle had found a new health plan, with Blue Cross Blue Shield, and then called Humana's toll-free number to cancel the Humana One policy, but claims he was "unable to reach anyone who could assist him." Likewise on subsequent attempts, whenever he called "he encountered an automated call system that would not enable him to speak to a person," according to the lawsuit.

Doyle then obtained Humana's fax number from a Blue Cross representative and sent a written cancelled request, which, according to the lawsuit, Humana did not respond to.

In early January of this year, Doyle mailed a cancellation request to Humana and also asked the company to stop deducting premium payments from his checking account and return the amount of premiums collected since November, when he first tried to cancel. Humana did not respond to the letter either, according to the lawsuit.

Finally, on Jan. 10, Doyle said he was able to speak with a Humana representative, but he was told that the representative did not have the authority to cancel policies.

The lawsuit alleges that Humana policy holders in 22 states were unable to cancel their policies prior to 2014 and continued to be billed for premiums or have the payments deducted from their bank accounts. The suit is being brought as a class action on behalf of Doyle and other consumers who may have had similar experiences, although Doyle is the only consumer identified as experiencing a cancellation ordeal.

In the lawsuit, Dirks, Doyle's lawyer, characterizes the problems as "a scheme designed to increase revenues" to "coincide with the January 1, 2014 inception date for the individual mandate."

Humana has not responded to the allegations, or yet filed a legal rebuttal, and the case may end up being settled. On Jan. 24, three days after the lawsuit was filed, the federal court assigned the case to an outside mediator.