Finally, some good tidings that uphold the rights of the sick
She wasn't mentioned in this article, but Nataline Sarkisyan couldn't have been far from the minds of the Court's justices in this case
And if it's bad for the health-insurance industry, it's good for consumers
Enjoy
Court curbs insurers' ability to rescind medical policies
California health insurers have a duty to check the accuracy of applications for coverage before issuing policies -- and should not wait until patients run up big medical bills, a state appeals court ruled Monday.
The court also said insurers could not cancel a medical policy unless they showed that the policyholder willfully misrepresented his health or that the company had investigated the application before it issued coverage.
Even better, the decision was UNANIMOUS, and requires Blue Cross to pay Steve Hailey's appellate costs as well should the company appeal
Let's fire up those torches, let's sharpen those pitchforks
"What this court is saying is these cases are going to juries, and that's going to scare the hell out of the insurance companies," Shernoff said. "Just one or two punitive damage awards by juries will clean this up, and the appellate court is now going to let that happen."
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In the Haileys' case, Blue Shield rescinded Steve's policy after authorizing more than $450,000 worth of hospital and other medical care. The insurer also demanded that he repay more than $104,000 it spent on his behalf.
The issue in this case is that Blue Cross said it had doubts about the veracity of Hailey's claims, yet decided to keep collecting premiums until such a time as it was in BCBS's financial interests to cancel his policy
Of course, the insurance industry never met a premium it wanted to give back, nor a policy it wants to pay out on
This ruling is desperately needed, and hopefully, will be joined and affirmed by other courts across the country
If Blue Shield had notified the couple more promptly, the court noted, Cindy Hailey said she could have obtained coverage through her employer before Steve's accident, avoiding the dispute and problems related to delays in his care.
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"These facts raise the specter that Blue Shield does not immediately rescind health care contracts upon learning of potential grounds for rescission, but waits until after the claims submitted under that contract exceed the monthly premiums being collected," the court wrote.
A health plan, the court went on, "may not adopt a 'wait and see' attitude after learning of facts justifying rescission." The court said companies could not continue to "collect premiums while keeping open its rescission option if the subscriber later experiences a serious accident or illness that generates large medical expenses."
Considered another way, this ruling says that insurers can't blame their own stupidity on everyone else when it comes to living up to their own policies
Nothing like a major lump of consumer coal for an industry that's in dire need of being operated on as short and tight a leash as possible
Seems that smart candidates for State Attorney Generals offices would be capitalizing on this ruling in their own elections