Consumer Advocates Blast Blue Shield Deal
Wednesday, January 7, 2009
Blue Shield of California has agreed to reinstate insurance to nearly 700 people whose health coverage was terminated after they became ill. Consumer advocates say the deal with the State of California lets the company off easy. KPBS Reporter Kenny Goldberg has more.
The state had accused Blue Shield more than 1,000 violations of the law. It wanted to fine the company nearly 13-million dollars.
Instead, the state dropped the case. In exchange, Blue Shield said it would make hundreds of affected people whole.
That's a bad deal, says Jerry Flanagan with the non-profit group Consumer Watchdog.
Jerry Flanagan: There's no mandatory penalty, there's no clarification of the legal standard, and most worrisome, Blue Shield is not required to admit any wrongdoing.
State Insurance Commissioner spokesman Darrel Ng (AYNG) defends the deal.
Darrel Ng: We thought that it was more important to get these 700 people their money back and health insurance, than keep negotiating for more.
The settlement requires people who want to be reimbursed to waive their right to sue Blue Shield.
Kenny Goldberg, KPBS News.
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