Blue Shield has settled wrongful recision claims against it by the Department of Managed Health Care. The DMHC alleged that Blue Shield wrongfully engaged in “post-claims underwriting”. When some health plan members submitted claims Blue Shield attempted to find a reason to cancel their insurance in order to avoid paying the claims. Such practices are prohibited by California law.
The settlement involves a $3,000,000 administrative fine and presents those people whose coverage was wrongfully canceled certain remedies, including the right to purchase new insurance and reimbursement for unpaid medical expenses. The settlement is complicated and could affect your legal rights. We encourage anyone interested in the settlement to fully investigate their options and to seek legal counsel if needed. A copy of the press release can be found here.