Blue Shield of California's unique way of "managing" claims

What's a poor insurance company to do when one of it's policyholders has the audacity to file a claim? Well, they certainly don't want to encourage that kind of behavior, so....

A new lawsuit accuses Blue Shield of California of looking for reasons to cancel the policies of people who file claims:

...the lawsuit, filed on Thursday, is "unusual" because "it seeks to force Blue Shield to stop the practice, rather than demand compensation for a policyholder who lost coverage." The lawsuit might "have a wide effect if it succeeds because Blue Shield alone has acknowledged canceling about 300 policies in the last two years," and the "outcome also could influence other insurers that collectively have revoked thousands of policies in recent years," the [Los Angeles] Times reports.

How do the insurers do it? Simple....if they can find a misstatement, or an omission of fact, anywhere in your application for the policy, they claim the right to rescind the contract for fraud in the inception. Now most people applying for a policy, or anything else that has an application as long as the ones for insurance, involving questions about health and lifestyle going back to your damn birth, are likely to make some mistakes. So the insurers can, in effect, cancel your policy any time they want, at least if the law allows cancellation for all omissions and errors. They can just collect your premiums as long as they find that profitable, then spring the old fraud claim anytime you become unprofitable, undesirable, etc.

So the lawsuit is likely to center on whether the law allows these bastions of free marketeerism to cancel for any mistake or omission, even unintentional ones.

California's insurance Commissioner appears to have taken the side of policyholders on this one. According to one report, state Insurance Commissioner Steve Poizner said:

I am very concerned about the practice of post-claims underwriting...The law does not permit a health insurer to agree to provide coverage and then wait until a claim comes in to decide whether to pay for the medical care a policyholder needs. Specifically, I am concerned about insurers rescinding coverage for small, inadvertent and innocent omissions on applications for coverage.

You and all the rest of us "lucky" enough to be insured, Mr. Poizner.

And yes, I am involved in attempting to get coverage of a medical claim as I write. Or at least to get a comprehensible explanation of what the coverage is, or why there is none. The last time I went through this, I spent about 8 hours dealing with Blue Cross (God knows how long Blue Cross spent) getting a $28 reimbursement for two trusses while I waited for hernia surgery.

And just think, this is the kind of "free market solution" the Republicans keep pushing for the health care crisis in America.