Blue Cross, the largest health insurer in California, has claimed the right to retroactively cancel heath insurance policies for any mistake, including honest mistakes, confusion, inadvertent errors, and other mistakes not involving fraud. Blue Cross has been known for providing “use-it-and-lose-it” health coverage because the company reviewed policies at the time claimants became ill and cancelled the policies. This left people without insurance at the time they were most vulnerable and at the time it was most difficult for them to get other insurance, and may have delayed urgently needed care. Critics have claimed that the Blue Cross application form was intentionally confusing to create errors that could be used as an excuse to cancel policies with large claims.

Confused about Blue Cross Class Action Settlement. Know your rights before you participate in the class action. You may have an individual lawsuit which could award you more damages than the class action. Find out which is right for you. [Sponsored Link]

Patient advocates have argued that policies can only be retroactively canceled if the insured lied or was willfully dishonest in some way. They cannot be cancelled if the applicant just made some kind of honest mistake.

According to a Los Angeles Times article on May 11, 2007 there is a proposed settlement in the class action suit. Blue Cross has agreed to stop canceling individual heath care policies unless it can show the insured engaged in deception. The company plans also to roll out a newer, clearer application form.

This new standard will also be applied retroactively to members of the class action who do not opt out of the settlement. Each participant in the action will receive up to $1,000 and have his or her case reviewed under the new standard. If the review shows that the applicant was not willfully dishonest, Blue Cross will pay the medical bills that would have been covered under the policy that was rescinded.

The proposed settlement was submitted to Los Angeles Superior Court Judge Anthony Mohr on May 11, 2007 for approval.

While calling this a consumer victory, Cindy Ehnes, director of the California Department of Managed Health Care, has warned that Blue Cross may not carry out its agreement, according to the LA Times story. She noted that Blue Cross has had a provision in its health insurance policies that the policy can be canceled for willful misrepresentation, but failed to live up to that provision when it failed to check a potential policyholder’s health history before approving his or her application. Her department fined Blue Cross $1-million in March of 2007 for this practice.

Click here to determine whether you should join the class or file your own suit.

Confused about Blue Cross Class Action Settlement. Know your rights before you participate in the class action. You may have an individual lawsuit which could award you more damages than the class action. Find out which is right for you. [Sponsored Link]