Obamacare Class-Action Suit Opens a New Legal Front

Lawrence Basich is on the hook for $400,000 in medical bills that would have been paid by his insurer had his application been processed correctly by Nevada’s Obamacare exchange.

In a closely-watched class-action lawsuit now gathering steam, Mr. Basich is one of two named plaintiffs in the suit against the state-run exchange — and the company that built it — that claims thousands of residents paid for health insurance, but never got covered because of technical glitches on the portal.

The suit may be the first since the Obamacare rollout that pits actual consumers against both the state and its contractor, in this case, Xerox Corp.

Other states that opted to set up their own private insurance markets — including Oregon, Maryland, Massachusetts, Vermont — have withheld payments, renegotiated contracts or threatened to sue their web vendors over faulty exchanges, but a civil complaint filed this month in Clark County, Nev., says residents were left in the lurch because both entities failed to deliver.