California Settlements Haven't Helped Many Dropped By Insurers

By Scott Hensley - NPR
March 12, 2010

Before Anthem Blue Cross of California got dinged for looking to raise rates by as much 40 percent, the company was put in a harsh political spotlight over cancellation of policies for people in the midst of expensive medical procedures.

Last year, Anthem Blue Cross, a unit of WellPoint and the biggest for-profit insurer in the state, agreed to pay a big fine and issue new coverage to the affected people who wanted it. Other insurers also agreed to settle with the state over retroactively canceling policies on technicalities, a practice known as "rescission."

All told California collected almost $14 million from insurers. Around 6,000 people affected by rescissions were eligible to get new policies under the settlements. But did they?

Not very many actually. A report for a California Assembly committee checking up on things found less than 300 people have gotten coverage from their former insurers under the deals. The independently prepared report called the results "highly disappointing."

What went wrong? The settlements were too complicated and the state agencies involved in carrying them out didn't do a good enough job reaching out to eligible people.

The report's author is Dr. Bryan Liang, a doctor and lawyer who runs the Institute of Health Law Studies at California Western law school in San Diego. The bottom line, he wrote:

Unfortunately, bluntly put, the settlement agreements have done little to bring justice to those who have had their health insurance policies illegally rescinded and represent limited deterrence against insurer abuses. The numbers speak for themselves: almost no victim took advantage of the settlement agreements to hold insurers accountable.

You can see Liang's recent testimony here.

Insurers Revoke Policies To Avoid Paying High Costs

by Joanne Silberner

Listen to this 4 minute NPR Story HERE:

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