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HEALTH PLANS: L.A. sues Healthnet

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.”

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PeterPaul Maurice Martin Recent comment authors
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Paul Maurice Martin
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Wow. You really get it.
I’m afraid pretty much only past/present industry insiders and sick people really do, although at least at this point a broader public has started to get the idea that the system is less than, uh, ideal…

Peter
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Peter

Paul, you’ve hit the nail on the head by showing the one big weapon insurance wields – bureaucratic paperwork. It starts with an incomprehensible EOB that requires the dogged patience of Sherlock Holmes to get to the truth, then the writing skills of Tolstoy’s War and Peace which gets you a reply that obfiscates the facts. You’re then required to construct numerous re-writes as if your editor was trying to re-direct your scripts to a dumber and dumber audience. Then you finally get to appeal to a court of last resort that you find is not a jury of your… Read more »

Paul Maurice Martin
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Interesting illustration. I imagine that what comes out in the press is just the tip of the iceberg as compared to the insurance fraud that’s never detected. Rather ironic that the industry has that phrase – “insurance fraud” – associated in the public mind with fraud on the part of consumers. Before – let’s call them “Stigma Health Care” -permanently terminated coverage for the one treatment that had been effective for me over the objectons of my doctors, one of whom was one of the world’s leading authorities on the condition with which I’d been diagnosed at the time –… Read more »