Anthem Blue Cross, the state's largest for-profit health insurer, has agreed to pay a $1-million fine and offer new coverage -- no questions asked -- to 2,330 people it dropped after they submitted bills for expensive medical care.

As part of a deal that the California Department of Insurance announced Wednesday, Anthem will offer to reimburse those people for medical expenses that they paid out of pocket after they were dropped. The company, a subsidiary of Indianapolis-based WellPoint Inc., estimated that those reimbursements could reach $14 million.

In exchange, the state agreed to drop its prosecution of its accusation that the company broke state laws in the way it rescinded members in preferred provider organization policies between 2004 and 2008.

The settlement follows Anthem's agreement last year to pay a $10-million fine to settle similar charges involving 1,770 members in HMO-type policies overseen by the Department of Managed Health Care, another state regulator.


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