Medical insurance companies are expected to meet their contractual obligations with policyholders. In some cases, these agreements work well. In others, the company may take advantage of the policyholders by failing to meet these obligations in order to make a better profit.
A recent case is gaining media attention because the policyholders argue that the medical insurance provider failed to provide proper coverage for needed prescriptions. Ultimately, this is pursued as a breach of contract matter since the policyholders allege they have a contract with the insurance company to meet these needs.
What happened in this case?
In this case, U.S. District Court for the Northern District of California San Francisco Division Case number 4:16-cv-04026, the plaintiff alleges that the medical insurance provider forces her and others in the class to use subpar medications. If she wants brand-name drugs, she contends that she is charged exorbitant rates. This was true, according to the complaint, even when the doctor specifically prescribed a name-brand medication and deemed its use medically necessary. Something that the policy was designed to cover.
What kinds of remedies are present in this type of case?
In these cases, plaintiffs can generally seek two remedies:
Injunction. This is a court order that requires the defendant to, essentially, cease and desist whatever it is that the defendant is doing that led to the lawsuit. In this case, if an injunction is granted the insurance company would likely be required to cover the cost of the name-brand medications.
Monetary award. Funds are also often sought in these suits. Monetary awards are generally designed to serve two purposes. First, to cover the costs and attempt to make things "right" again. Second, to serve as a form of punishment against the offending party for their wrongdoing.
The remedies are often determined by the judge presiding over the case.
What can New Yorkers learn from this case?
Although the case is out of California, it is one that holds true for people across the country, including here in New York. Consumers who purchase insurance, whether for health, auto or home ownership needs, expect their provider will meet their end of the agreement. An insurance provider that fails to meet the terms of the contract can be held liable for the breach, something that can be enforced through a lawsuit.