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Blue Shield of California Wins Hailey Trial

Judge Issues Directed Verdict that Rescission was Proper

SAN FRANCISCO, May 28 /PRNewswire-USNewswire/ -- The following is a statement by Blue Shield of California General Counsel Seth Jacobs:

Today's verdict is a complete vindication for Blue Shield of California. It means we acted properly every step of the way. It means that our underwriting procedures were fair and complete, our application was clear, and we acted in good faith. There was no post-claims underwriting. The evidence of deceit by the Haileys was overwhelming. This decision proves that Blue Shield of California had every right to rescind the Haileys' coverage.

After five years of litigation, the Haileys finally admitted what Blue Shield maintained all along. The Haileys admitted that they willfully misrepresented material information on their Blue Shield application for health coverage. The Haileys admitted that they did so in order to obtain health coverage that they knew that could not obtain had they been truthful. The Haileys admitted that they understood the Blue Shield application and that the application was clear and unambiguous.

Despite unrelenting negative coverage in the Los Angeles Times that consistently mischaracterized the facts, we fought this lawsuit because we knew we had behaved properly and we were confident that the evidence would speak for itself. It has.

While we are very pleased with today's victory, we acknowledge that the healthcare system needs to be reformed. We will continue our longstanding advocacy of universal health coverage regardless of pre-existing conditions because we believe everyone has a right to quality health care.

SOURCE Blue Shield of California
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