Although Progressive had been successful in getting a proposed class action dismissed, a three-person judicial appeal panel has overturned the original court decision and allowed a case brought by plaintiff Elizabeth Lopez-Negron back to court.
The lawsuit claims that Progessive Casualty Insurance allowed people on Medicare and Medicaid to buy policies that they weren’t eligible for. Lopez-Negron claimed that Progressive’s website enticed her, and other plaintiffs in the action, to buy “Health First” auto policies even though they weren’t eligible – given that they were beneficiaries of Medicare or Medicaid. She also claims that, following a 2010 auto accident in Philadelphia, Progressive wrongly refused a claim for medical treatment.
New Jersey’s Fair Automobile Insurance Reform Act was introduced in 1990, and has provisions that mean insurers must allow policyholders to designate their health insurance providers as primary payers of personal injury benefits.
Health First plans, however, aren’t suitable for Medicare beneficiaries as federal legislation states that if a primary payer (like Progressive in this case) exists, the federal programs must be a secondary payer.
But Medicare and Medicaid beneficiaries aren’t eligible for health-first plans because federal law requires the government programs to be secondary payers if a primary payer – Progressive in the instant case – exists.
Although Lopez-Negron is covered by Medicare, she selected, paid for and received a health-first plan from Progressive after applying for it on her website and because the insurer apparently didn’t know that she was on Medicare, the panel said.
Want the latest insurance industry news first? Sign up for our completely free newsletter service now.
Lopez-Negron sued the other driver involved in the accident who was covered by
GEICO. After the accident she went to an Aria Health System hospital, but when the hospital sent its bill to Progressive, the insurer refused them, given that she had enrolled in a Health First plan. Medicare erroneously paid some of her bills but refused the hospital stay as the medical facility is not an approved provider.
In resurrecting the case, the federal court found that progressive had at least three opportunities to prevent people wrongly buying the Health First plans.
1: It could have built its website’s online application forms to weed out ineligible buyers
2: It could have used “repeated interactions between insurers and buyers” to check that Medicare/Medicaid covered clients didn’t purchase the policies and
3: Progressive could have simply asked “the simple question” of what coverage the potential clients had.
Related stories:
Progressive Insurance turns to Flo as profit goals threatened
State lawmaker wants to block car insurance rate hikes for seniors
