Blue Shield of California...potential class action lawsuit...BD
In a victory for consumers, a state appeals court Tuesday opened the way for class-action lawsuits against insurers that may have improperly dropped individuals for alleged errors and omissions on applications after medical claims had been submitted. The 2nd District Court of Appeal called into question California health insurers' practice of waiting until individual policyholders incurred medical expenses before scrutinizing individual policies for misstatements, then canceling coverage for omissions and errors.
"This decision will likely invalidate thousands of health insurance recisions," said William Shernoff, a Claremont lawyer who represents policyholders. Dr. Richard Frankenstein, president of the California Medical Assn., said the ruling was "an important victory for patients." "Denying coverage or payment to a policyholder after the fact creates a horrible situation for the patient," said Frankenstein, a Garden Grove lung specialist. "Hopefully, the courts are showing that they understand the importance of fairness to people who have tried their best to meet their obligation to have their healthcare paid for."
The case involves health insurance policies purchased by individuals. Group coverage, such as that sponsored by employers, is not vulnerable to such cancellations because, by law, it must be extended to every member of the group who desires it.