By Terry Baynes

(Reuters) - Consumers who purchased new health plans from Blue Shield of California have sued the insurer, claiming they were misled into thinking the insurance would cover their desired doctors and hospitals.

In their complaint filed in California state court on Wednesday, San Francisco residents John Harrington and Alex Talon accused Blue Shield of misrepresenting that their plans, sold on California's health exchange, would cover the full provider network advertised on the company's website.

They sued on behalf of a class of people who had purchased so-called "preferred provider organization" plans from the insurer only to realize that the doctor and hospital networks for their plans were limited.

Blue Shield of California spokesman Sean Barry said in an emailed statement that the company was reviewing the complaint.

"We take these charges seriously, and believe enrollees should be as informed as possible about the products they select," he said.

The 2010 Affordable Care Act, often called Obamacare, created online insurance exchanges where individuals can buy health coverage with income-based government subsidies. The law requires individuals to buy a minimum level of coverage or pay a penalty.

As insurance companies have tried to make their plans offered on health exchanges more affordable, they have adopted a strategy of limiting their networks of medical providers. These networks have come under scrutiny as individuals have begun to realize their new plans may exclude their preferred doctor or hospital.

Both Harrington and Talon, who were previously uninsured, purchased health plans from Blue Shield of California to comply with the new insurance requirement, known as the individual mandate, the complaint said.

Harrington bought a so-called silver plan on California's online exchange while Talon bought a platinum plan through the insurer's website. They said they made their choices based on Blue Shield's alleged representations that their doctors would be covered.

The lawsuit accuses Blue Shield of advertising "one of the largest networks in the state" - with more than 60,000 physicians and 351 hospitals - and of failing to disclose that the networks for certain plans were substantially smaller.

After receiving medical treatment numerous times between January and March, Harrington and Talon later discovered that their providers were not covered, forcing them to pay the charges out-of-pocket, the complaint said.

The lawsuit alleged claims of false advertising, unfair business practices and breach of contract under California law.

The case is Harrington et al v. Blue Shield of California et al, San Francisco Superior Court, No. 14-539283.

(Reporting by Terry Baynes in New York; Editing by Ted Botha and Dan Grebler)