Health Care Insurers Agree to Reinstate Coverage for Californians

Thousands of Californians whose health care coverage was revoked after incurring expensive medical charges may soon qualify for coverage again.

The California Department of Managed Health Care (DMHC) reached an agreement last week with Kaiser Permanente and Health Net to reinstate health coverage for nearly 1,200 people, according to an article in the Los Angeles Times. State officials say the settlement could pave the way for similar agreements with other insurers that could affect another 4,000 state residents.

“Patients should not live in fear of losing their health care coverage when they need it most,” California Gov. Arnold Schwarzenegger told the newspaper.

The agreements the DMHC reached with Kaiser Permanente and Health Net affect individual policy holders whose plans were canceled between April 2004 and October 2006.

Under the terms of the agreement, both insurers will allow affected policy holders to seek repayment of medical expenses up to $15,000, according to a report by California Healthline. Kaiser Permanente, which will reinstate 1,092 of the 1,200 policy holders affected by the settlement, also agreed to pay a $300,000 fine and allow reinstated policy holders to submit claims for gap coverage or costs incurred after their policies were dropped. Kaiser did not admit any wrongdoing in the settlement but it could be fined another $3 million if it doesn’t pass a survey of its practices by state regulators, the Sacramento Business Journal reported.

The settlements may have been in both insurers’ best interest.  Three months ago, a jury awarded $9 million to a California woman who had to suspend chemotherapy treatment after her policy was revoked by Health Net, the LA Times reported.

The City of Los Angeles is suing Health Net and Anthem Blue Cross for allegedly unlawfully canceling policies, or denying and delaying benefits that left thousands of Californians with unpaid medical bills (“LA Sues Insurer for Canceling Health Care Coverage,” April 22).