Sunday, July 6, 2008

State of California "Fearful" of Enforcing $1 Million Fine Against Wellpoint/Anthem Blue Cross for "Illegal" Health Insurance Policy Rescissions

Crazy as it sounds an AP story on Thursday reported that the California Department of Managed Care "didn't even try to enforce a million-dollar fine against health insurer Anthem Blue Cross because they feared they would be outgunned in court."

Last year the department announced that it would fine the insurer for improperly rescinding individual heath insurance policies in the midst of the California rescission controversy. Since then, most insurers have announced policy changes in the way they rescind coverage.

From the AP story:
The department's director, Cindy Ehnes, told The Associated Press on Thursday that the agency has had success in forcing smaller insurers to reinstate illegally canceled policies and pay fines, but Blue Cross is too powerful to take on.

"In each and every one of those rescissions, (Blue Cross has) the right to contest each, and that could tie us up in court forever," Ehnes said of the approximately 1,770 Blue Cross rescissions between Jan. 1, 2004, and now.
It's not like this issue hasn't already been decided in favor of consumers. Last December, a California appeals court decided that California insurers can't cancel a health policy unless the applicant "willfully" misrepresented their health status: California Insurers Lose a Big Court Case In the Health Insurance Policy Rescission Controversy

If California can't protect consumers, who can?
Avoid having to check back. Subscribe to Health Care Policy and Marketplace Review and receive an email each time we post.

Blog Archive