Obamacare has been the target of several criticisms for the struggles it has encountered in its rollout, but this is the first lawsuit against both the health insurance exchange market and a state in its administration. Las Vegas lawyers are representing two named plaintiffs who are suing the Nevada-run exchange and its contractor, Xerox Corp, for their failure to provide payment for medical services after the individuals enrolled online due to technical glitches in the exchange portal according to this article in the Washington Times.
Pitting consumers against both the state and its contractor, this class-action lawsuit is gathering steam and may result in an outcome significant for other state-run exchanges like in Oregon, Maryland, Massachusetts and Vermont that have also withheld payments or renegotiated contracts without consumer consent or knowledge. In their suit, the Las Vegas lawyers contend that “The [Nevada state exchange] and Xerox have utterly failed to create a system that works and as a result, thousands of Nevadans remain uninsured despite payment of insurance premiums.”
The two named plaintiffs are Lawrence Basich and Lea Swartley who both submitted payment in 2013 for coverage stated to begin January 1, 2014. Basich experienced a heart attack on New Years and several subsequent surgeries are costing him in excess of $400,000 because his Obamacare coverage was not in effect. Swartley apparently experienced a similar lapse in coverage despite payment, according to the suit filed by the Las Vegas lawyers.
Analysts are saying that this lawsuit is the first of its kind, and its designation as a class-action suit could be valuable for other consumers who experienced similar lapses in coverage but would not sue individually because of the high costs of hiring attorneys and paying court fees. But “a group of plaintiffs can sue in an aggregated form and thus make it cost-effective to join,” says one health policy expert from Harvard Law School. And apparently there are thousands in Nevada who would be eligible to join in Basich and Swartley’s suit.
Basich and Swartlely’s Las Vegas lawyers say “there are more than 10,000 state residents who have paid for health insurance through the exchange, but either have not received coverage or did not get it on the correct date.” Officials at both the Nevada Obamacare exchange and at Xerox Corp have not responded to requests for comment about the pending litigation, but one exchange spokesperson admitted that they have not been served the suit as of yet. He added that officials at the Obamacare exchange “are keeping all options open when looking at assessing penalties on Xerox for not meeting the contract requirements.”
Which is all fine and good, in a regulatory sense, but the individuals in the suit are claiming they’re entitled to personal compensation. Which may or may not come without the litigation, and even so, it’s possible that the state-run exchange may claim governmental immunity, according to the Harvard Law health policy analyst.
The battle’s not over, either. Nevadans who tried to sign up for health coverage by the March 31, 2014 deadline also ran into technical problems on the exchange’s website. They were given a special two-month extension to finish up their applications, and are hoping they stay healthy until then.