Use it and Lose it

May 11, 2007

I still wonder where is the government regulation in all this. Whey is it that the trial lawyers have to protect consumers and at the same time get the worst reputation.

Blue Cross of California agreed Thursday to stop canceling individual health coverage unless it can show policyholder deception — a major shift by the state’s largest health insurer that could lead to sweeping industry wide changes.

The move is part of an effort to settle a class-action lawsuit on behalf of as many as 6,000 people canceled since late 2001. It is an about-face for Blue Cross in what had become known as “use-it-and-lose-it” health coverage because the cancellations were often triggered by patients’ claims for treatment.

The insurer’s new stance is aimed at ending rescissions based on policyholders’ honest mistakes, inadvertent errors and other inconsistencies about their medical histories on applications for coverage. Consumers contend that the forms are purposely confusing, increasing the odds that applicants will make mistakes.

Blue Cross makes about-face on cancellations.

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