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Consumer Watchdog Applauds L.A. City Attorney's Efforts to Reinstate Cancelled Blue Cross Patients; Urges State HMO Regulator to Immediately Reinstate Coverage
Date:4/16/2008

SANTA MONICA, Calif., April 16 /PRNewswire-USNewswire/ -- Consumer Watchdog today joined L.A. City Attorney Rocky Delgadillo in announcing the city's lawsuit alleging that health insurer Blue Cross engaged in unfair business practices by illegally cancelling the health insurance of patients after they got sick.

The practice -- known as "rescission" -- has affected at least hundreds of patients who have been left uninsured, uninsurable, and facing up to hundreds of thousands of dollars in medical debt when their polices were retroactively cancelled by their health insurance company.

Consumer Watchdog said that while the L.A. City lawsuit will not provide reinstatement until the matter is litigated or settled, state regulators have the power to order reinstatement of coverage immediately.

On Monday, Consumer Watchdog sent a letter to Department of Managed Health Care (DMHC) Director Cindy Ehnes giving the DMHC 10 days to make a decision about whether it would require immediate reinstatement in scores of cases where the agency has already found the policy rescissions to be illegal. Read Consumer Watchdog's letter citing the DMHC's legal authority and duty to require reinstatement of coverage: http://www.ConsumerWatchdog.org/resources/ReinstatementLetterDMHC.pdf.

In the letter sent yesterday, Consumer Watchdog wrote:

"Rescission of a health plan contract is extremely detrimental to the patient. Not only is the rescinded patient left uninsured and often hundreds of thousands of dollars in medical debt, but is also virtually uninsurable in the individual market. Particularly harmful is the fact that a patient rescinded under an allegation of fraud is barred from enrolling in high-risk coverage through the [state of California] Major Risk Medical Insurance Program (MMRMIP). As result, patients who have been wrongly resc
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SOURCE Consumer Watchdog
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