The state will be forced to defend itself against a class-action lawsuit arguing that thousands of teachers, state employees and retirees were overcharged this year for their health insurance, a judge has ruled.
Fulton County Superior Court Judge Cynthia Wright denied the state’s claim that it was immune from being sued over premiums paid by members of the State Health Benefits Plan. The plan provides health coverage to about 650,000 Georgians and has been a huge political headache for Gov. Nathan Deal and the Department of Community Health for more than a year.
Lawyers for plan members have estimated that teachers, state employees and retirees have been paying more than $10 million a month in excess health insurance premiums since the agency made changes in January aimed at placating those covered by the plan. The changes were made after plan members complained that the state was trying to save $200 million a year in part by charging them much higher out-of-pocket costs for health care.
The DCH’s changes resulted in lower out-of-pocket costs, but they left some members paying much higher rates while getting the same coverage as members paying much lower premiums.
Those paying the higher premiums still have lower deductibles for their coverage, but they say much of what they pay for standard health care doesn’t go toward those deductibles. Some teachers and retirees said they should have been allowed to sign up for the lower-cost plan once the DCH made the coverage fixes in January.
In her order, Wright said the plan amounts to a contract for providing coverage. Because of that, she said, the state can not claim immunity from being sued.
“State agencies enter into contracts on a daily basis, and its citizens have a right to expect the state to live up to its promises,” said A. Lee Parks, one of the attorneys representing plan members. “When the service is your health insurance, it is more than frightening that the state would argue that the policy holders cannot make the state live up to its promises.”
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