Blue Cross Announces Policy Changes
Blue Cross of California on Tuesday announced that it will revise its appeal process and create an ombudsman position to address concerns about some individual policy cancellations, the Los Angeles Times reports.
State regulators last spring launched an investigation of the HMO after policyholders said their policies were terminated illegally after seeking costly medical care. The former policyholders allege that their policies were canceled without evidence that they intentionally omitted information in their policy applications. The suits also claim that insurers use vague and confusing applications that lead to mistakes, which later can be used to cancel coverage (California Healthline, 9/18).
Blue Cross is the largest health insurer in California. It has written about one million individual policies, or about half the state market.
Some lawsuits also name Blue Shield of California.
Deborah Lachman, a senior vice president overseeing individual policies at Blue Cross, said the insurer also would simplify its application form by requiring, in most cases, medical histories going back no more than five years -- instead of 10 years.
Lachman said the changes would not affect premiums.
According to the Times, Department of Managed Health Care officials said the agency could take action against Blue Cross "possibly as early as today or Thursday."
DMHC Secretary Cindy Ehnes said the agency has not fully considered what effect the changes will have on its investigation.
Insurance Commissioner John Garamendi (D) said the insurance department also "will very carefully look at these new policies" to ensure that consumer rights are protected. The Department of Insurance oversees part of Blue Cross' business (Girion, Los Angeles Times, 9/20).