Health Net reinstating 926 California policyholders

California health plan Health Net has become the next insurer to offer individual policyholders new coverage--with no medical pre-screening--to 926 people whose policies it canceled retroactively after they became ill. Health Net has signed an agreement with the California Department of Insurance under which it will pay $3.6 million in penalties, plus as much as $14 million in reimbursements for medical charges that it previously declined to pay. The company didn't admit to any wrongdoing as part of the settlement, however.

The Health Net settlement is the first with the state's Department of Insurance, but only one of several of similar fines and penalties imposed by the state's Department of Managed Care, which has arguably been the nation's most aggressive regulator of healthcare policy of late. For example, in May, Kaiser Permanente and Health Net agreed to reinstate 1,200 beneficiaries, and in June, PacifiCare agreed to offer coverage to 57 former members. It seems likely that more of the same will follow from both departments, however.  The real question, as I see it, is whether the practices targeted by California regulators aren't as common in other states, or instead, that regulators elsewhere don't consider such rescissions an issue.

To learn more about this agreement:
- read this Los Angeles Times article

Related Articles:
Kaiser, Health Net agree to reinstate 1,200 beneficiaries
CA residents to get renewed health coverage
WellPoint pays hospitals $11.8M to settle bills from rescissions
PacifiCare restores canceled policies