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Few Calif. Consumers Helped By Insurer Settlement

March 10, 2010 | Associated Press
Copyright: The Associated Press. All rights reserved.
Source: Associated Press
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LOS ANGELES -- Very few consumers benefited from California regulators' highly publicized settlements with health insurers accused of dropping sick patients from their policies, according to a state assembly report.

The Department of Managed Health Care and the Department of Insurance oversee the individual policies affected by the practice of rescission, the health insurance industry's term for dropping patients from coverage when they try to make claims.

About 2.6 million Californians, or 9 percent of the state's insured, have individual policies.

In a report Tuesday, the state's Committee on Accountability and Administrative Review said fewer than 200 people went through the arbitration process set forth by the regulators. More than 6,000 Californians were subject to rescissions by the five largest insurance companies between 2004 and 2008, according to settlement agreements between the regulators and the insurers.

Regulators reached settlements with HealthNet, Anthem Blue Cross, Blue Shield of California, PacifiCare of California and Kaiser Permanente.

The settlements did not require the insurers to accept any blame. But they did order the insurers to pay fines ranging from $50,000 for PacifiCare to $10 million for Anthem Blue Cross, and they required insurers to allow the policyholders to be reinstated under new policies.

The settlements also prohibited policyholders from taking further legal action against insurers if they attempted to recoup medical costs.

After-hours calls to the regulators were not returned.



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