Insurer Agrees to Expanded Coverage for Eating Disorders

Nov. 26, 2008— -- The largest health insurance provider in New Jersey has agreed to settle a class action lawsuit brought by families who claimed they were denied adequate coverage for eating disorders.

Under the tentative agreement, which still must be approved by the federal judge overseeing the case, Horizon Blue Cross Blue Shield of New Jersey will now treat eating disorders as biologically based illnesses, which will entitle patients to greater coverage. The settlement covers only the beneficiaries of fully insured plans.

The lack of full coverage has been one of the main complaints of families of people who suffer from eating disorders, many of whom have had to pay tens of thousands of dollars out of pocket for treatment.

Advocates and doctors said they hope the settlement, one of the first of its kind, will lead other insurance companies to take similar steps.

"We hope this really influences the way we view and how seriously we take the issue of eating disorders," said Dr. Ovidio Bermudez, medical director of the Eating Disorders Program at Laureate Psychiatric Clinic and Hospital in Tulsa, Okla. "My hope is this will set the stage for other third party payers to take a look at the seriousness of eating disorders."

Horizon Blue Cross of New Jersey agreed to pay about $1.2 million to 500 patients. In court papers, the plaintiffs' lawyer said that the expanded coverage for eating disorders would apply to more than 1 million people and would likely pay out $20 million over the next 15 years.

Horizon BCBSNJ spokesman Tom Rubino said in a statement: "Horizon Blue Cross Blue Shield of New Jersey believes the settlement is in the best interest of all the parties involved and in line with the direction of federal parity law for mental health."

An estimated 11 million people in the United States have eating disorders, the vast majority of them young females, but many insurance companies have been reluctant to cover the full extended cost of treatment, which can run more than $1,000 a day.