Only one day after Blue Cross of California came under fire from the governor, medical associations and Hillary Clinton for sending letters to doctors requesting them to do the work of the company’s underwriters, the insurer has said that it is stopping its letter campaign.

Blue Cross gets a mouthful

Blue Cross had been sending copies of patients’ health care insurance applications to doctors advising them to contact Blue Cross if they notice that information contained on patients’ applications doesn’t match what patients tell their doctors. Translation – the insurer wanted doctors to ‘rat out’ their clients – a term used by several critics, including Governor Schwarzenegger in an interview with the Los Angeles Times, to describe Blue Cross’s conduct.

The insurer got a mouthful not only from Schwarzenegger, but from doctors, medical associations and even Senator and Democratic presidential candidate Hilary Clinton, who was quoted as saying that Blue Cross’s conduct is an “example of how insurance companies spend tens of billions of dollars a year figuring out how to avoid covering people with health insurance."

Insurer responds to criticism

Well Point Inc., the insurer that operates Blue Cross of California, has said that the reason it was sending out these letters was to ‘keep costs at a minimum and guard against fraud.’ However, many insurance companies have discovered that rescinding policies absolves them from paying claims that they don’t want to pay. In fact, there is a growing trend of insurers who now rescind policies at just the hint of a misrepresentation instead of the required ‘willful’ misrepresentation.

Consumers entitled to better treatment

Insurance companies who wrongly rescind policies may be acting in bad faith. Consumers are entitled to better treatment and can sue insurance companies when this happens and may be entitled to getting their claims paid and for any damages that they may have incurred. If your insurance company wrongly rescinded your policy, consider contacting an attorney who understands how insurance companies operate. To contact an attorney whose practice focuses in this area of law, please click here.