Following an article by the Los Angeles Times, the AP (2/12) reports, "California's largest for-profit health provider, Anthem Blue Cross," owned by WellPoint, "has agreed to pay a $1 million fine and take back 2,330 people whose insurance was rescinded after they submitted bills for expensive care." The insurer, in a settlement with the state of California, also agreed to "reimburse the dropped patients for medical costs they've paid since their policies were terminated, which the company estimates will cost it another $14 million." In return, "the state Department of Insurance agreed to stop pursuing allegations that the company broke state law when it dropped patients with preferred provider organization policies between 2004 and 2008."
According to Sarah Rubenstein in the Wall Street Journal (2/11) Health Blog, Anthem's settlement comes after the company "entered a similar settlement with the state's other insurance watchdog, the Department of Managed Health Care," in July. Rubenstein added that "this is the last of California's investigations into insurance cancellations of this type," according to the Los Angeles Times report. "Other companies that have agreed to reinstate coverage are Blue Shield of California, Health Net and Kaiser Permanente." But, the insurers still "remain targets of lawsuits from patients."
In January, the Sacramento Bee (2/11, Calvan) noted, "the Department of Insurance announced that Blue Shield of California was reinstating medical insurance policies to nearly 700 consumers." And "in September, Health Net said it would restore coverage for nearly 1,000 subscribers." In Anthem's settlement agreement the company was also ordered "to change how it handles so-called policy rescissions," or face "additional fines of up to $2 million," according to the state. Los Angeles Business (2/11) also covered the story.
Health Net to pay up to $14 million to settle two rescission lawsuits. In the latest of a string of rescission settlements in California, the Los Angeles Times (2/12, Girion) reports that Health Net "has agreed to pay as much as $14 million to settle a pair of lawsuits brought on behalf of 800 former policyholders whose coverage was dropped after they submitted substantial medical bills." Under the agreement, which "won preliminary court approval" yesterday, individuals "whose health insurance policies were canceled since 2004 are eligible for payments of up to $218,000. The average payment is expected to be $7,836." The Health Net agreement "includes provisions that parallel earlier settlements with regulators, including an offer to extend coverage to the affected consumers without regard to preexisting conditions. It also requires Health Net to reimburse medical expenses paid out-of-pocket by former policyholders after they were rescinded." In addition, Health Net agreed to "extend its self-imposed moratorium on rescissions until lawmakers or regulators establish standards for them -- or until the company establishes a third-party review process that is acceptable to the judge overseeing the case."
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