In the latest fall out over health plans behaving badly, the City of Los Angeles is suing Healthnet about its policy of paying bonuses to staff for cancellations.
The suit alleges that Health Net sold at least 100,000 individuals policies over the last four years. If the city attorney proved that each policy was falsely advertised and vulnerable to an unfair cancellation — and if the maximum penalty was assessed in each case — the company’s liability could run into the hundreds of millions of dollars, sources close to the investigation have concluded.
Healthnet isn’t sounding too contrite, though.
Health Net’s Olson said the company’s application had been approved by regulators and didn’t need to be changed.”There are 110,000 Californians who figured it out and were able to fill out the application in a way that got them low-cost, high-quality coverage,” he said. “It’s fine and it’s working.”