Santa Monica, CA — WellPoint, the nation’s largest health insurer and parent company of Blue Cross of California, announced a 20% profit increase as evidence mounts that the company is engaging in widespread and illegal cancellations of coverage. According to the Los Angeles Times, Blue Cross employees admitted in depositions that they reviewed 1,500 policies a week and targeted patients with certain diseases for retro-active cancellations.
In a press release today, WellPoint disclosed that its profits for the first quarter of 2006 had increased in part because the company paid less in medical claims.
“WellPoint is getting fat by breaking its promises to patients. Overturning insurance coverage after patients get sick is an outrageous abuse that must stop,” said Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights (FTCR). “Illegal retro-active cancellations make a mockery of health insurance.”
Lawsuits filed throughout California in March allege that Blue Cross of California and WellPoint have created a “retroaction review department” whose sole purpose is to terminate policies for patients who had previously been given approval for medical treatments. An undetermined number of patients — who had been enrolled in policies and paid premiums — have been told that their coverage is retroactively canceled when they seek medical treatment due to a purported discrepancy with information provided in their enrollment form.
According a Los Angeles Times story today, in a previous case against Blue Cross last year, a Blue Cross employee admitted that the company canceled policies even though errors could have been inadvertent. State law, however, allows policy cancellations only if patients made such omissions deliberately. According to testimony, reviews were triggered by claims made for certain illnesses — hypertension, and cardiovascular disorders, and diabetes.
FTCR has petitioned state regulators to investigate the practice and use their regulatory authority to shut-down the retro-active review department.
Read FTCR’s petitions here.
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The Foundation for Taxpayer and Consumer Rights (FTCR) is California’s leading nonpartisan consumer advocacy organization. For more information, visit us on the web at: http://www.ConsumerWatchdog.org