Blue Cross Blues

A new court ruling issued Tuesday clears the way for a lawsuit against Blue Cross for allegedly cancelling the insurance policies of people after they got sick.

An appellate court has rejected a challenge to that lawsuit from the Los Angeles City Attorney’s office. The challenge claimed the City Attorney did not have authority to bring the suit, but now that the challenge has been rejected the case can proceed.

It alleges that when Anthem Blue Cross receives a significant health care claim, the company pulls out the insured person’s original application and looks for any omission or mistake to justify cancelling the policy – back to day one.

A Congressional investigation found that over five years Blue Cross’s parent company, Wellpoint, and two other insurers avoided paying more than $300-million by rescinding 20,000 policies.

“Rescissions, on the face of it, deny patients coverage when they need it the most,” said Robert Bitonte, President of the Los Angeles County Medical Association.

Assistant Los Angeles City Attorney Jim Colbert says insurance should only be cancelled if there’s been intentional misconduct, but Colbert says Blue Cross Routinely ignores that limitation and pounces on inevitable, unintentional, errors on a complex form. “They just look for any discrepancy between the answers you gave on the largely incomprehensible questionnaire, and what they find in your medical records,” Colbert said.

Anthem Blue Cross issued a statement saying that the company “Will decide on appropriate next steps after we have had sufficient time to review the decision.”


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The California legislature has attempted to pass bills requiring outside review before health insurance can be rescinded. They were vetoed by the governor.

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