Blue Cross makes about-face on cancellations

 

Blue Cross of California agreed Thursday to stop canceling individual health coverage unless it can show policyholder deception — a major shift by the state's largest health insurer that could lead to sweeping industrywide changes.
The move is part of an effort to settle a class-action lawsuit on behalf of as many as 6,000 people canceled since late 2001. It is an about-face for Blue Cross in what had become known as "use-it-and-lose-it" health coverage because the cancellations were often triggered by patients' claims for treatment.

Among other changes, Blue Cross agreed to consult policyholders about application problems in deciding whether a rescission was justified.
Jerry Flanagan, an advocate with the Santa Monica-based Foundation for Consumer and Taxpayer Rights, said the deal was a step in the right direction. But, he said, the problem won't go away unless regulators require health plans to prove to them that an applicant intentionally lied before any rescission is final. The proposed settlement maintains policyholders' current right to appeal to regulators only after a cancellation.

Source: Blue Cross makes about-face on cancellations - Los Angeles Times