Yesterday's L.A. Times had two noteworthy articles about developments on the rescission front in California. The first article reports on a suit just filed by the Los Angeles City Attorney, Rocky Delgadillo, against the largest California health insurer, Anthem Blue Cross. The suit asserts fraud and false advertising, claims that Blue Cross's coverage is "largely iillusory," and asks for penalties of over $1 billion to be assessed against the company. The complaint alleges that Blue Cross "engaged in an egregious scheme to not only delay or deny the payment of thousands of legitimate medical claims but also to jeopardize the health of more than 6,000 customers by retroactively canceling their health insurance when they needed it most." In addition, the L.A. City Attorney's office states that Blue Cross, "appeared to have been less than candid" about changes it was making to its process of evaluating cancellation of health insurance policies.
The second article reports on Gov. Schwarzenegger's new initiative to deal with overreaching rescission practices. The Department of Managed Health Care announced that it would re-open every health insurance policy cancellation over the last four years from the largest five health insurers in California, have an independent arbiter evaluate those rescissions and order reinstatement of all policies that are found to be wrongfully rescinded.
California continues to aggressively confront health insurer policy cancellations. It's great to see in light of the significant insurer overreach that exists in this area.