Blue Cross Backpedals on Cancellations

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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 Los Angeles Times reports.


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.


The insurer’s new stance is aimed at ending rescissions based on policyholders’ honest mistakes, inadvertent errors and other inconsistencies about their medical histories on applications for coverage. Consumers contend that the forms are purposely confusing, increasing the odds that applicants will make mistakes.


“This is a very significant consumer health victory something we believe they should have been following all along,” said Cindy Ehnes, director of the state Department of Managed Health Care.


Read the full L.A. Times story

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