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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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3 replies »

  1. 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…

  2. 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 peers, but just some more industry insiders paid by the insurance company you’re fighting. And all this is expected from you when you also have to work 50-60 hours a week to pay the co-pays and deductibles and keep a household afloat.
    And people wonder why I left the insurance hoax and oppose mandates that hook you back into a perverted system.

  3. 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 – this action on Stigma’s part eventually forced me to leave my job in declining health to seek other employment for new insurance coverage – I’d taken to closely monitoring their statements after noticing a number of “errors.”
    Somehow every error that was made was in their favor. Before being distracted by their termination of coverage and their internal appeals process, which was the bureaucratic equivalent of a kangaroo court, I’d recovered several hundred dollars by asking my doctor for itemized statements and comparing them with Stigma’s explanation of benefits.
    So it would turn out, for example, that according to my doctor’s records, on such and such a date I’d received and paid for six trigger point injections. But according to the Stigma statement, I’d only received one, and that’s what they would reimburse me for until I wrote another letter of appeal with doctor’s statement enclosed. It was quite an accounting project given the “error rate” and having a chronic disease; I always wondered if my work on that project is what caused their denial of coverage several months after I’d started it.

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