California limits insurer lies

Insurance company dishonesty suffered a crimp this week when a California court put the kibosh on health insurers' practice of waiting until consumers are sick or injured before investigating their medical history and canceling their coverage using the excuse that information was left off their original application.

To be frank, I had thought Congress put a stop to that shit nationally 15 years ago. Or was that yet another rule that was forgotten?

The practice now banned in California is called post-claims underwriting. Actually it had been banned in California under a 1993 law, but it took a court this long to rule that the law actually exists. This practice had led to many lawsuits by customers and to state enforcement attempts when greedy insurers retroactively canceled folks' policies just when they needed them and billed them for services that were performed before the cancellation. In one case, Blue Shield dropped a policyholder and caused him to suffer permanent, disabling damage to his bladder because he had to wait too long for surgery.

Ironically, when the man and his wife sued Blue Shield, a lower court judge initially made them pay $104,000 to Blue Shield - not the other way around. Can you believe that? You read that right: A corporation broke the law and injured a customer, and when the injured man sued, he had to pay the corporation $104,000. But now that decision has been overturned by the new ruling against insurers.

As long as insurance companies are part of the American health care system, Congress needs to step in and ban post-claims underwriting nationwide, if it's not already illegal. But if there's ever real health care reform, the money-grubbing insurance racket can't be permitted to be a part of it.

(Source: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/12/26/BALUU4K02.DTL)