Lawsuits Accuse Insurers of Wrongful Cancellations
Thirteen lawsuits were filed on Thursday by former health insurance policyholders of Blue Cross of California and Blue Shield of California alleging that the insurers systematically canceled policies for members whose medical bills were high, the Los Angeles Times reports.
The lawsuits were filed in Los Angeles, Ventura and Sonoma counties, and are similar to 10 lawsuits filed last month alleging that Blue Cross improperly cancelled some members' policies. Three of the suits filed Thursday accuse Blue Shield of the practice.
The former policyholders allege that their policies were canceled because of minor or unintentional omissions on their policy applications.
Robert Alaniz, a spokesperson for Blue Cross parent WellPoint, said the company is "confident that we are acting appropriately and consistent with our legal obligations to our members," but he declined to comment further.
Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights said that the problem likely is "much wider" and that FTCR has received complaints about cancellations involving several companies, including in Nevada and West Virginia.
The Department of Insurance will hold a hearing on June 1 on Blue Cross' profitability, which is three times the market average on certain products it sells. Insurance Commissioner John Garamendi (D) said he would examine whether the company's high profit margin was associated with systematically canceling policies.
The Department of Managed Health Care also will investigate the allegations as part of a larger probe into cancellation complaints (Girion, Los Angeles Times, 4/28).