Blue Cross Cancellations Called Illegal

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Blue Cross of California “routinely” violated state law when it canceled individual health insurance coverage after policyholders got pregnant or sick, making no attempt to determine whether they did anything to merit such “harsh” treatment, according to a state investigation of practices that appear to be industrywide, the Los Anegles Times reports.


State regulators plan similar investigations of other health plans in California, and the findings against Blue Cross ratchet up the risk of liability for other insurers, many of whom face lawsuits from consumers who claim they were illegally dumped and subjected to substantial hardships.


As a result of its unprecedented investigation, the Department of Managed Health Care on Thursday said that it had fined Blue Cross $1 million , an amount immediately criticized by canceled policyholders and consumer advocates as too small to matter to an insurer whose parent company, WellPoint Inc., earned $3.1 billion in profit last year on revenue of $57 billion.



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