Calif. regulators fine Blue Cross for canceling policies | Sacramento Bee | 3.23.07
State regulators fined Blue Cross of California $1 million after an investigation found the insurer systematically violated state law when it canceled policyholders regardless of whether they were dishonest about pre-existing medical conditions.
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The report said the legal standard for cancellations is high because such action may put the policyholders’ health at risk by making it difficult to obtain care. Such cancellations also hurt hospitals and physicians by denying them payment for treatment that should have been authorized
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The state investigation was fueled by a series of stories in the Los Angeles Times. The articles disclosed that Blue Cross, along with other insurers such as Blue Shield of California and Kaiser Permanente, routinely canceled coverage of individual policyholders whose medical care resulted in large claims, prompting some to lose their homes or suffer other hardships.
Culling insurers’s high risk groups, by any means, may be widespread and potential fines balanced against risk savings?