Court Paves the Way for Local Officials To Fight Health Plan Rescissions

California cities and counties soon could begin combating health plan rescissions and other insurance practices after an appellate court ruled that local prosecutors have the authority to sue health insurers, the Los Angeles Times reports.

Decision Details

In 2008, the Los Angeles city attorney's office filed a lawsuit accusing Anthem Blue Cross of California of violating state regulations that prohibit insurers from revoking coverage after members submit claims.

Blue Cross argued that the case was invalid because the state Department of Managed Health Care has jurisdiction over insurer practices.

However, last month the state Court of Appeal in Los Angeles ruled that state law authorizes local attorneys to sue health insurers over actions that affect consumers.

Reaction

Some local officials praised the court decision for inviting greater scrutiny of the state's health insurance industry.

However, DMHC noted that local prosecution could create duplicative regulation and drive up health care costs.