The American Insurance Association and Anthem Health Plans on Wednesday filed a class-action lawsuit in the U.S. District Court for the Southern District of New York against the health insurer that plans to end its business with the Centers for Medicare and Medicaid Services.
Anthem, a unit of UnitedHealth Group Inc., said it has agreed to pay $100 million in damages to the plaintiffs.
Anthem said in a statement that it “deeply regrets” the decisions made by Anthem’s board.
Anthem also said it will end a business relationship with the federal government, the Justice Department and the Centers of Medicare and Medicare Services, and it has terminated the employment of 1,800 employees, most of them in its New York, California and Florida facilities.
Anthem and UnitedHealth have faced criticism for agreeing to pay out more than $600 million to cover millions of people who lost their insurance after the Affordable Care Act was passed in 2010.
The decision to end the insurance program has created uncertainty for thousands of Americans who relied on it and led to a spike in claims, some of which have been denied by insurers.
The insurers said that the decision to leave would be a loss for them.
“The decision to withdraw from the health insurance marketplace was a mistake and we regret the impact that it has had on our members, their families, and our employees,” said Michael Leiter, CEO of the American Insurance Federation, in a press release.
“We look forward to reviewing the facts in this case and making our final decision in the coming months.”
Anthem said the health-insurance programs are part of a “long-term strategy” to “ensure the ACA is not only affordable and accessible, but also has the capacity to provide quality care for our members.”
In its statement, Anthem said that it is “committed to the health of our members,” and that it plans to continue to work with the agencies and other stakeholders “to deliver the best care possible to our members through the marketplace.”
The company said it would “receive further information on the case in the near future.”
Anthem also announced a plan to buy insurance from a group of insurers that it said will provide “lower premiums and lower deductibles.”
It said the company would also “open an additional 200,000 locations” in the next six months to allow insurers to offer plans with greater choice and lower costs.
Anthem plans to pay for the purchases by selling insurance on its website and by issuing bonds that it says will be backed by “the full faith and credit” of the U,S.
Anthem will also sell health insurance directly to its members through brokers, it said.
“Our customers will be able to choose and compare plans on their own, receive quotes directly from the companies that offer them coverage, and keep the full faith, credit and trust of their government,” Anthem said.
The company also said that Anthem plans “to make sure we remain part of the solution to health care and insurance costs by providing affordable coverage to the most vulnerable Americans.”
Anthem has faced criticism from the U with some claiming that the insurer has done little to improve its quality of care and has taken on too many high-cost enrollees.
A study by the Kaiser Family Foundation found that the insurance company paid out more money than it took in in claims to treat more than 9,400 people with COVID-19-related medical conditions and 4,600 with non-COVID-related conditions.
The researchers found that Anthem had been spending about $1 billion a year on claims to deal with the COVID epidemic.
The Centers for Disease Control and Prevention, meanwhile, has called on the U government to help cover the costs of health care for people who have health insurance through the exchanges.