Officials from Anthem Blue Cross and Blue Shield of California on July 17 agreed to pay $13 million in fines and offer new health plans to more than 2,200 California residents who had their coverage rescinded after becoming ill and incurring large medical bills, the Los Angeles Times reports. Under the agreement, Anthem will pay a $10 million fine to the state Department of Managed Health Care (DMHC) and will offer new policies to the 1,770 former members who have had their coverage canceled since 2004, while Blue Shield will pay a $3 million fine to DMHC and will offer new policies to the 450 former members who have had their coverage canceled since 2004.
In addition, the insurers agreed to establish a process for former policyholders to be compensated for medical costs they paid out of pocket after they were dropped from their plan, as well as other damages, such as loss of home or business resulting from bad credit due to unpaid medical debts. Neither insurer admitted any wrongdoing under the agreement.
In related news, House Oversight and Government Reform Committee Chair Henry Waxman (D-Calif.) at a hearing on health insurance policy rescissions that same day said that the committee will launch a broad investigation into practices used by private health insurers in the individual market.
