WellPoint To Pay $6M To Settle Health Insurance Rescission Lawsuit
On Thursday, WellPoint agreed to pay $6 million to settle allegations that its subsidiary Anthem Blue Cross -- the largest for-profit insurer in California -- improperly dropped coverage for more than 6,000 policyholders, the AP/Sacramento Bee reports (AP/Sacramento Bee, 6/20).
A series of Los Angeles Times articles, regulatory investigations and lawsuits beginning in 2006 showed that certain insurers rescinded coverage for policyholders after they got sick or needed treatment.
In 2008, the city of Los Angeles filed a lawsuit against WellPoint, alleging that the insurer engaged in such practices (Terhune, "Money & Co.," Los Angeles Times, 6/20).
Details of Settlement
The settlement is significantly less than the $1 billion in fines and restitution originally sought by former Los Angeles City Attorney Rocky Delgadillo.
Anthem did not admit wrongdoing as part of the settlement.
The settlement funds will be divided between the city of Los Angeles and Los Angeles County.
Individual policyholders will not receive any payments from the settlement, according to the AP/Bee (AP/Sacramento Bee, 6/20).
Comments on Settlement
The Los Angeles city attorney's office said the settlement was in part the result of several changes made by WellPoint, including:
- Making changes to customer applications;
- Seeking third-party review of insurance rescissions; and
- Taking other steps to ensure compliance with insurance rescission laws ("Money & Co.," Los Angeles Times, 6/20).
Broadcast CoverageOn Thursday, the AP/KPCC's "KPCC News" reported on the settlement deal ("KPCC News," AP/KPCC, 6/20). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.