Los Angeles health care attorney William Shernoff filed a lawsuit on Friday seeking to block Blue Shield of California from retroactively canceling member policies after claims have been approved, a practice that critics allege is far more common in the insurance industry than has been reported. The Los Angeles Times reports that the suit may have broad implications for insurers across the country:
"What makes the latest suit unusual is that it seeks to stop the practice, rather than demand compensation for a policy holder who lost coverage. It could have a wide effect if it succeeds, because Blue Shield alone has acknowledged canceling about 300 policies in the last two years. The outcome also could influence other insurers that collectively have revoked thousands of policies in recent years.