Continuing with an ongoing industry-wide investigation, the California Department of Insurance has cited WellPoint subsidiary BC Life & Health for improperly revoking individual health insurance policies. BC Life & Health, which revoked 1,880 individual policies during 2004 and 2005, already was being sued by consumer advocates and lawyers for policyholders over the cancellations. Now it's facing the wrath of the Department of Insurance, which has found that more than half of the BC Life & Health recessions it examined weren't handled appropriately. It has issued 49 citations, each of which could result in a $10,000 fine. The Department of Insurance also is investigating the policy-cancellation practices of Blue Shield, HealthNet, Cigna and Aetna.
This is not the first time WellPoint has faced charges its policy cancellation practices are out of line. WellPoint subsidiary Blue Cross of California was recently fined $1 million by another state agency, the Department of Managed Health Care, after it was found to have consistently violated state law regarding rescissions.
To get more information on the cancellations:
- read this Los Angeles Times article
Blue Cross of CA settles plan-cancellation suits. Report
CA agency mulls review of policy cancellations. Report
Kaiser forced to reinstate coverage. Report
Kaiser pushes for policy cancellation rules. Report