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In what appears to be a continuing revelation of corrupt insurance claims practices, Anthem Blue Cross will announce today that the health care insurance company will pay $1 million in fines to the State of California, and offer reinstatement to 2,330 policy holders whose policies were wrongfully rescinded. In July, we posted about a $13 million settlement that the Blue Cross reached in a case involving 2,200 rescinded policy holders. This settlement notice comes on the heals of an article in the San Francisco Chronicle describing consumer outrage about the company’s intent to increase premiums on individual policy holders as much as 30-40% next year.

In the settlement reached with the California Department of Insurance, Anthem Blue Cross will pay the $1 million fine and offer to reimburse its cancelled policyholders for the medical expenses incurred during the time their insurance claims were wrongfully denied. The Los Angeles Times reported that the cost of reimbursement may approach $14 million. Note, that these payments would simply be of amounts the insurer was obliged to cover before it wrongfully terminated policies. According to the Times, Blue Cross will also invite the disenfranchised policy holders to enroll in new coverage without the necessity of meeting any new medical qualifications. Of course, in order for a policy holder to obtain reimbursement for medical expenses wrongfully denied by the carrier, a waiver of any further claim against Blue Cross is required.

From these recent developments it is clear that Anthem Blue Cross, as an insurance company, adopted a practice of denying claims and rescinding policies when the cost of care became disagreeable to them. It has been estimated that Blue Cross saved in excess of $35 million in this campaign.

For those that were wrongfully rescinded, this settlement does nothing to address the horror that each of them felt when told that they had no insurance coverage for treatment that had already been obtained or that was being recommended. Many of them may have been in critical need of treatment. All of them were suddenly faced with great financial duress, a burden that they thought they had protected themselves against. Now, with their credit ruined and after fighting with the carrier for years, they are simply asked to "get back on board." Blue Cross should be ashamed of the way they treated these people. In the view of this author, this "penalty" is merely a slap on the hand. Anthem Blue Cross should not be rewarded in this way when they engage in conduct designed solely to evade responsibilities that they had promised to their insureds.

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