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Health insurance companies operating in California have been ordered to pay more than 13 million dollars in fines for illegally dropping coverage of clients.
Both Anthem Blue Cross and Blue Shield of California will pay big bucks for dropping policy holders from their coverage. They will both also have to reinstate over 2000 applicants whose policies were dropped.
The companies would drop policy holders when they filed for coverage of major health treatments, citing errors with applicant applications, that of course were not mentioned when the applicants first applied for coverage.
“This fine sends the message that if you come into California to sell health insurance, you must play by the rules,” said Cindy Ehnes, the director of the state’s Department of Managed Health Care.
Anthem Blue Cross will pay more than 10 million and reinstate more than 1700 policy holders, while Blue Shield of California will pay out 3 million and reinstate more than 400 policy holders.
Despite agreeing to pay out, both companies have denied any form of wrongdoing.
