Another California health plan is making headlines after wrangles with state regulators. In this case, the state has ordered Kaiser Foundation Health Plan to reinstate the coverage of a woman whose policy it says was illegally canceled. The woman, who lives in Northern California and has been a Kaiser beneficiary for more than 20 years, is undergoing treatment for kidney stones. Recently, Kaiser had canceled her policy, claiming that she left out key information from her application when she converted her policy from group to individual coverage. Kaiser billed her $13,000 for past care and even threatened to report her to the authorities for fraud. The state Department of Managed Health Care found that there was no evidence that the woman had tried to deceive Kaiser, as the treatment they said she had failed to disclose had been performed by a Kaiser physician. It has taken the woman two years to get her coverage back.
This is the first time the DMHC has forced a health plan to reinstate a policy. However, it appears to be getting tougher on cancellations. It recently fined Blue Cross of California $200,000 for canceling a southern California woman's policy, though it didn't require the health plan to reinstate her. Health plans in California are facing many legal challenges, in fact, with Blue Cross having just settled a group of 70-odd suits and Blue Shield facing several more.
Find out more about health plan legal issues in California:
- read this item in the Los Angeles Times