More Heat for California Insurers Canceling Policies
21 02 08 - 21:36
Posted by Jacob Goldstein
The running saga over California health insurers canceling policies rolls on. Now, the Los Angeles City Attorney is suing an insurer called Health Net for allegedly rescinding coverage when members submit claims for costly treatments.
The suit, filed yesterday, applies to individual policies. A Health Net spokesman told the Los Angeles Times that the company paid $200 million on claims for those sorts of policies last year. He said the company has reviewed its cancellation policies in the past few years and added an internal independent review to "protect people's rights in a fair and appropriate way," according to the LAT.
The City Attorney, who last week launched a Web site focused on health insurance, is also opening a criminal investigation into Health Net's practice of "paying employee bonuses based in part on canceling policies of people who have submitted substantial medical claims," the LA Times said. The bonuses got the company into trouble with state regulators last year.
Blue Cross of California, which is owned by WellPoint, is appealing a $1 million fine for rescinding individual insurance policies. And last week, public criticism prompted the company to stop sending letters to doctors, asking them to identify omissions in patients' health insurance applications.
The industry says it rescinding the policies of consumers who have misrepresented their health histories helps prevent health fraud.