Court Awards $9M to Cancer Patient Over Cancelled Coverage
Patsy Bates, a 52-year-old breast cancer patient, just learned of a court order that awards her $9 million dollars in damages after her healthcare provider, Health Net Inc., one of California’s largest private medical insurance providers, cancelled her coverage just when she needed it the most.
Bates, a grandmother and hair salon owner, was undergoing chemotherapy for breast cancer in January 2004 and had accrued medical expenses in excess of $129,000 when Health Net cancelled her coverage. She was forced to forego medical care until a charitable organization pitched in several months later.
A private arbitration judge, Sam Cianchetti, who is retired from the Los Angeles County Superior Court, ruled on the case, saying Health Net acted in bad faith and broke state laws. The ruling is the first of its kind and is expected to send a strong message to healthcare providers for the “egregious” and controversial practice of weeding out policyholders who accrue large medical bills.
The weeding-out policy is standard practice in the industry although insurers say it happens only on an infrequent basis. The company which operates Blue Cross of California, the state’s largest for-profit insurer, issued a statement saying they are in favor of changing the policy that calls for such cancellations. Comment was declined by Blue Shield of California.
Steve Poznier, California’s insurance commissioner applauds the ruling, saying the practice is “illegal, immoral and will not be tolerated.” Other insurance regulators and patient advocates were pleased but stunned by the ruling.
Defending its decision to cancel Bates’ coverage, Health Net officials claim they’d never have insured her in the first place if she’d revealed her true weight and the presence of a pre-existing heart condition when she filed for coverage.
Bates claims her application was completed by an aggressive broker for the healthcare provider who hinted at a lower monthly premium. At the time the application was completed, Bates’ hair salon was enjoying a busy day and she didn’t have time to complete the form herself. Bates says she was satisfied with the insurance coverage she already had and had not been shopping for another carrier.
During arbitration, Health Net revealed a quota-based internal program that rewards employees with bonuses for meeting a quota of cancellations measured by the amount of money the cancellations save the company.
- Do you think the insurance company did the right thing by denying coverage to Ms. Bates? Or did they drop her coverage unfairly?
- Is the court’s ruling fair? Is $9 million acceptable? Too little? Too much?
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tHE people from the company should be ashamed of themselves. I’m glad that this lady got a break and wish her all the best!
There should be more cases involving insurance companies that cancel their clients policy when they most need it. This companies always try to get out of their obligations, it is the same with the auto insurance. Had they paid for her medical expensenses as they should have done in the first place, they would not been laiden with the 9 million settlement. Serves them right. Let this be a lesson for the all the industries out there that play this sorts games with people’s lifes.
Unbelievable. The company admits to an internal INCENTIVE PROGRAM FOR THEIR EMPLOYEES TO CANCEL THESE PEOPLES’ POLICIES! HealthNet should be slammed for a lot more than $9 million. You know its only a drop in the bucket for them anyway! I think they got off easy! A perfect example of our corrupt health care system and lives being run by the insurance companies.
I think it’s bogus that Health Net is claiming a pre-existing heart condition and weight is the reason they dropped this poor woman, especially since she was being treated for BREAST CANCER. Seriously, people, that is a lame response to horrid behavior by a company that should know better. Face the facts, people!
Here is your “free market healthcare” — I was dropped by my US insurance under similar circumstances during lymphoma treatment and I am a 27 yo American male, not overweight…thank God I am also a Canadian citizen and was able to receive treatment there. Those against universal healthcare and in support of this system that makes its decisions solely based on KPIs, metrics and ca$h should be ashamed of yourselves.
Being in the health insurance business as a broker of many carriers nationwide, I understand the intricacies of the carriers and the needs of those seeking insurance. I was perplexed as to why did Healthnet decide it was in their right to cancel an insureds policy? I had seen the story first on the news but no info was provided as to why it was done. Health insurance companies have the right by state insurance statues to cancel a policy under the following reasons : 1) lack of premium payment 2) by group or class 3) insurance carriers moves out of state or no longer offers a specific product line; finally due to misrepresentation of fact on the application which gives the carrier the right to rescind the policy and return all premiums paid back to the insured.
The fact is that the insured misrepresented her weight and height and didn’t disclose a pre-ex condition. As wrong as it may have been on her part as well as the brokers not to be forthright about her health status worse yet was Healthnet’s true motivation in rescinding her policy for financial conservation and overexposing it as a misrepresenation of fact .
My recommendation to those who read this, insurance is a business..it is in the business of covering risk that is unpredictable. . If a risk can be planned or predited it will be avoided. Don’t lie on your insurance coverage application because your policy can be rescinded if the fact stated on the contract ,the application, has misrepresentations.
Justice is well served by this ruling. Everyone at some point in their lives gets sick. Pre-existing conditions should not matter one bit. Health insurance companies serve a public purpose, not merely looking for profits, and until they realize this no penalty is too great for them. I would like to see personal. criminal liability for the arrogant decision makers in the insurance companies that cause people so much grief at a time when they need the most support.
All I can say is wow.iT’S AMAZING HOW INSURANCE COMPANIES WILL GLADLY TAKE YOUR MONEY BUT WHEN IT COMES TIME TO PAY OUT THEY DO EVERYTHING NOT TO PAY. IF COMPANIES LIKE THESE DON’T WANT SICK PEOPLE THEN THEY SHOULD NOT ACCEPT THE PERSONS MONEY. 9 MILLION WASN’T ENOUGH SHE SHOULD GET 50 MILLION
I can’t believe the number of people who lie about being a smoker or their weight when getting an insurance policy just to pay a lower premium. (Come on, I know half the smokers reading this lie!) Although rewarding people for “lying” on applications is the “American way”, she should be cited for “insurance fraud” as well. I know many insurance companies “look” for these lies to terminate coverage. A common practice is to “prove” the dependent is “legally” entitled to coverage. Another is to make sure people are actually married, and don’t “pretend” to be a spouse under some common-law marriage belief. To verify all these details before providing coverage is considered too expensive however, to check these details after medical claims starts coming in is well worth the carriers expenses. BEWARE… changing the current practice may make it much harder to get coverage!
Gina,
Obesity predisposes to breast cancer. Also makes it harder to detect early.
The health insurance companies make it exceedingly difficult for you to answer all of you health questions going back many years. I recently purchased insurance and they aked me about things that really only my doctor should know not some insurance beauracrats. And I sure the information is very safe with them they would never allow outside access or share it with other companies.
The insurance companies will happily take your money as well as many others’ and intentionally make applications very complicated. Naturally when they have to pay out they are like ” well you never told us about this condition you had 23 years ago so we have to cancel” after collecting money for several years.
Well..in part im glad she won her case..but also in part…im saden..cuz that company will only think of it as a business expense n raise the rates…thats why i cant afford health insurance..
Im a 25 year Army vet n wuz forced into retirement after bein wounded in Iraq in 2006…ok i know i hear yall sayin…Theres the vetern administration…yea it is…but…when i got to the Air force base close to me they send me to a private hospital n a private doctor…I have to pay 30% plus meds…try that on my lil income…how many of yall can honsetly say yall can live off only $635 a month…n since im disabled…i cant work…cuz once again..Insurance companys consider me a HIGH Risk…
When iz sue city americans realize law suits only cost others?…like ya vets yall love to send n fight for ya freedoms n at the same time…vets has lil or no rights…i know this to be fact n if ya dig deeper into the vet admin…ya find out alot more…But i Guess this iz Fair to all
Im not the best speller in the world…so if any mistakes…please forgive
The court settlement was good, but this was a civil case. Where is the criminal prosecution of the executives responsible for this travesty of callousness and shame. Surely there is room for some corporate executives in our vast prison system. We could free a few drug dealers if the prisons are too crowded, these insurance company executives are a greater threat to society. We need to get a few hundred CEOs in jail in this country, then we might see corporate fraud and greed come under control.
I’m glad I live in Canada.
The insurance companies are in human and the award was not big enough in my opinion. Our health care system is driven by greed when the CEO’s are making millions of dollars in salaries and stock options. Health care in this country needs to be non profit and then and only then will it work. People have no business making dividends off the money that is supposed to go to our health care providers. It’s the same twisted logic that says we care about human rights in China but we continue to support the sweat shops at the exspense of our economic health just to make a handfull of people rich beyond their wildest dreams. Wake up America you are being sold down the poop shoot.
The award was just. Cancellation at a patient’s time of need not only takes advantage of their momentary weakness but can often delay and limit the possibility of life saving care. Medical care has to be made a universal right, not a product for no one can predict the time or amount of their need for medical care. It can not be saved for!
Its so touching to see the AMA commercials suddenly expressing concern about the millions of people in this country denied affordable health insurance. Our family paid 20% of its our income in medical expenses last year. (Insert health insurance company name here) tried to drop my spouse repeatedly in the middle of chemotherapy for a brain tumor. Dealing with lying insurance companies over tens of thousands in medical bills has drained the religion out of me, but I can still warn that “as they sow, shall they reap.” These folks are about to get a big surprise. A Democrat in the White House will be a much needed transfusion. We might even get these tin-man shells of human beings hearts under our new programs …
Doesn’t surprise me, I just started working as a full-time perm employee at a health insurance company. The are self insured for health and dental insurance benefits. There is a mandatory waiting period of 3 months for all new employees before the health insurance benefits kick-in.
GREGORY - As great as government sponsored health insurance sounds, where will the money to cover it come from? Our taxes. And as history has shown us, nothing run by the govt works, with the exception of the IRS, of course. Social security? No. Public schools? No. Medicare? No.
What I am afraid is that if we ever get govt controlled health insurance, exact same thing will happen, it will flop. Take the UK for example, with its socialized healthcare system. A man who developed breast cancer was denied treatment by the govt bureaucrats b/c breast cancer treatment was approved only for women. Obviously he sued, and won, but it did cost him valuable time.
It’s pleasing to see the outcome of this ruling. As far as I am concerned it was the duty of the Insurance company to do due diligence prior to collecting premiums. Ever wondered that when insurance companies collect premiums from it’s clients they have good faith as soon as it’s pay out time, the rules change. This ruling will perhaps keep insurance companies in check.
I have Health Net, but it doesn’t sound like there would be any reason to switch to another company since they are all this bad? Yuck
Don’t worry too much, they will appeal the verdict and in California the appellate court throws out 90% of these cases with an unpublished opinion! It’s a big round robin pay off… Heath Net won’t pay em a dime! They already bought the verdict! Mark my words…..
This is just another abuse in the US health system. Another practice that is really wrong is the practice of cost shifting. This involves billing higher rate for services to everyone to cover the costs of treating uninsured and typically nonpaying people that come to the emercency room for their mode of primary treatment.
The sad part is insurance companies have set rates they pay for services that are well below the rates that are charged by the healthcare providers. This is all well and good except when you get an honest hard working uninsured person. These people do not have the clout to negotiate the lower rates and end up getting raped by the providers. When is this going to stop?
Vet-that waster 25 years.
My Aunt was in the military (Ret) and worked for Hinnes Hospital (Ret) for over 20 years. I think there is more to your story than you are telling. I feel sorry for you and your health condition, but what exactly happened to you that they would not treat?
This is yet another reason we do NOT want government healthcare. I would like to say one thing….In illinois you need proof of insurance to get a drivers license. We should make people that are considering starting a family get a license too. They (like illinois drivers) should have to provide proof of insurance before they are allowed to have children!!
Another demonstration of “free market” health care. So tell me again why do so many people think we have the best system in the world?
Insurers are crooks.
We need universal healthcare coverage like they have in the civilized countries of the world.
The World Health Organization has rated the United States number 37 in the world in terms of the quality of its health care. This includes factors like access to health care, infant mortality, and life expectancy. We do not have the best health care in the world as politicians and pundits continue to claim. The millions (billions?) in profits claimed by health care providers are a direct reflection of health care not delivered to millions of American citizens. The money is there,; it’s just being misallocated making a select few filthy rich while those less fortunate suffer. Health care should be a basic human right, not a luxury.
Power to the people.
Speak People, for those who have money can subvert the system and make politician seem like the true puppets that they are.
Speak People and let the politicians know that you are watching.
Let them do their job and protect the people; otherwise, they make a mock of Democracy (The Demo [people] have been removed from our system and replace with lobbyist).
Wow, a patient should never be dropped from health insurance while undergoing chemotherapy. My mom fought leukemia for 10 months and went through a lot of chemo, so this hits home with me.
David: Thanks for your comment. As the wealthiest nation, the United States should be leading the way in healthcare.
This situation with Health Net Inc. should wake us up as consumers and boycott this insurance company until they go out of business. No one should be treated in such an inhumane way when dealing with a life threatening issue. The last thing on ones mind is the insurance, only surviving the illness. I recommend to all who read these comments to spread the word to boycott Health Net Inc. and those who are already members to find other health care insurance. We as consumers can make a difference to stop preditory companies like Health Net Inc. from doing this again to others. Because you know they will. Then let’s go after Metropolitan Life. They’re another story.
A simple solution to end this health insurance abuse is have the states regulate the health insurance industry just like a public utility is regulated.
This will rein in the obscene profits made by the insurance industry taking advantage of the vulnerability of sick Americans.
How does one deal with an eight hundred pound Gorilla that misbehaves and denies coverage for your medical bills?
Patsy Bates found out when a California court awarded her 9 million dollars for damages.
Her insurance carrier, Health Net cancelled coverage when she needed breast cancer treatment.
Her lawyer, William Shernoff, not only read the book, he wrote the book: “Fight Back and Win: How to Get HMOs and Health Insurance to Pay Up”.
Bravo for LA City Attorney Delgadillo and New York City Attorney General Andrew Cuomo for going after the health insurance industry for fraudulent practices such as cancellation for pre-existing conditions and underpayment for out-of-network doctor bills.
To read more:
http://jeffreydach.com/2008/02/24/fighting-the-abusive-practices-of-health-insurance-companies-by-jeffrey-dach-md.aspx
Making Your Health Insurance Company Pay Up by Jeffrey Dach MD
Jeffrey Dach MD
http://www.drdach.com
The insurance company is in the business of making money for its stockholders. The nature and structure of incorporation requires that any action it takes benefits those who have an expressed interest in its profits. The corporate algorithm is simple: profit by any means you can get away with. There is no question of morality and no concern with human suffering… a company such as Health Net Inc. cannot be expected to make a purely fiscal decision such as denial of coverage with any concern other than money. Humanity only enters into the picture when government, as the representative of the people, steps in with coercive power and forces the corporate body to act in a certain direction by steering it with monetary power, such as damages in a lawsuit. A real problem arises when government abrogates its duties to the people it represents and treats a corporation, which, after all, is nothing more than a monetary golum invented to profit a group of people, as an entity with rights equal to a living, breathing human being capable of experiencing fear, pain, love and the sting of betrayal. Nowhere in our constitution is it stated that a corporate entity should enjoy all the rights of a man. These are powers which have been purchased over time with the persuasive powers of cold, hard, heartless cash. We have slowly allowed our nation to be taken over by corporations.
This is what Mussolini meant when he stated that “Facism” could be more accurately called “Corporatism”
Agree with Alicia.. Thank God she got a break.