California regulators have fined two of the state's largest health insurers a combined $13 million, with Anthem Blue Cross and Blue Shield of California also agreeing to offer new coverage to former members whose plans were canceled after they became ill.
Blue Cross, a Thousand Oaks-based unit of Indianapolis-based WellPoint Inc., will pay a record $10 million fine and offer new coverage to 1,770 former members it has canceled since 2004, the Department of Managed Health Care said Thursday.
Blue Shield, a not-for-profit health plan based in San Francisco, will pay $3 million and offer new policies to 450 former members whose plans were rescinded over the last four years.
The insurers also agreed to establish procedure for the former members to recover out-of-pocket medical costs. Neither company admitted to any wrongdoing in the settlements. Kaiser Permanente, Health Net and PacifiCare all made similar agreements earlier this year.
"The (Blue Cross) fine is a record in DMHC history and it sends the message that if you come into California and sell health insurance, you must play by the rules," said Director Cindy Ehnes in a statement.
The settlements came a day after Los Angeles City Attorney Rocky Delgadillo sued Blue Shield over the same issue.
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