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Cal Blue Shield wins recision case, but it’s very, very strange

So Blue Shield of California wins the first case  it’s fighting over the recission issue. But it’s in very strange circumstances. The plaintiffs (a couple trying to get coverage for a doctor they like that wasn't in their employer’s plan) changed their story and said that they had lied on their application. 

Blue Shield’s lawyer even went after St. Lisa herself!

Blue Shield's lawyer, Jacobs, also complained about "unrelenting negative coverage in the Los Angeles Times." Despite that, he said, "we fought this lawsuit because we knew we had behaved properly and we were confident that the evidence would speak for itself. It has."

So four burning questions remain.

1. Why did the couple who’ve been fighting this all the way, suddenly capitulate when not significantly different circumstances in the only other case to go to arbitration (the Healthnet case) led to a $9m verdict? Something happened here and in the interests of transparency Blue Shield had better tell, or suspicions will be raised.

2. If it’s so sure that it’s legally in the right, why did Blue Shield settle with the state insurance commissioner earlier this year (albeit on pretty favorable terms) and pay the out of pocket expenses and offer insurance to the 678 people with claims against it? If you’re in the right (and legally I think they may be in many of those cases), why be expedient?

3. It’s clear that at least Healthnet and likely Wellpoint/Anthem/California Blue Cross had either special departments looking hard for errors/lies on applications in the individual market that were associated with heavy claims, and in Healthnet’s case were paying bonuses on the cancellations. How did Blue Shield identify its cases? And in a related issue, wasn’t there a better test case for the plaintiff bar among the 600 odd cases?

4. If Blue Shield is right, why aren’t Kaiser Permanente, Wellpoint, Healthnet, United and the rest all fighting their cases too? Are they just really sitting on the sidelines watching? Or were they secretly backing Blue Shield hoping that victory for their competitor would mean that they would be spared expensive settlements in their class action lawsuits.

The irony of course is that (within the limited world of health insurers) Blue Shield (and Kaiser) are the most aggressive proponents of health reform that would do away with the need for (or ability of) insurers to do medical underwriting in the first place. So for that at least they should be applauded.

But there continues to be something very odd about the way this is unfolding.

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PeterNatemanon Recent comment authors
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Nate
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Nate

read the constituion then make that stupid claim. Start with the second amendment then read up on equal protection and tell me who trashed what. This is even funner as the current president is appointing someone to the SC based on their nationality and empathy for others, that is a mockery of our constituion and the blindness that justice is suppose to show. I also love how they completly ignore bankruptsy law to give subornate creditors preferential treatment.

Peter
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Peter

Taxes are also a function of what you get for them. How come Warren Buffet’s secretary pays a higher tax rate than he does?
“How come citizens of other countries are lined up to the moon and back to get into the US..”
And Europe, and Canada. I doubt many well off middle income groups in other countries wish they were here. And those freedoms, would they be before Bush trashed the constitution or after?

Nate
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Nate

why do people in other countries have effective tax rates well north of 50% and not nearly the freedoms we do Peter? How come citizens of other countries are lined up to the moon and back to get into the US while few American’s are desperatly trying to get into Europe?

Peter
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Peter

How come citizens in countries with single-pay have NO recission issues and no apps to fill out and no legal issues related to their pre-existing conditions?

Nate
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Nate

Insurance fraud is still a felony in most states, they take the stand and they might just testify themselves right into jail. Their story didn’t make any sense anyways. The premium for individual policy for husband and spouse for a year in CA probably would have covered the additional OOP to see a non network provider. What sort of doctor are they seeing who would annually bill greater then the cost of individual coverage? He had to have some serious teeatment going on or they are covering up something else. If you do some investigation outside the left leaning media… Read more »

m
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1. Perhaps they got a conscience and decided not to lie about lying?
2. Like you said, favorable terms. Also, no more uncertainty plus they avoid setting bad precedent in the courts.
3. Good question.
4. See #2 about precedents.
Frankly, I’m not sure what’s weird about all this.

anon
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anon

Can I just point out how weird it is that conservatives are opposing health care reform by citing the case of a Canadian woman who is trying get coverage for a doctor she liked that isn’t in her country’s plan? I mean, I can’t go to the Mayo Clinic and I’m an insured American. Mayo is out of network for me. (And, of course, I’m assuming my brain tumor wouldn’t be declared a “pre-existing condition,” but that’s a whole other rant) Does it really help their case to suggest that it’s awesome for Canadians to sue their government to fix… Read more »