Blue Shield of California has been hit with a lawsuit over its practice of canceling policies of customers after they submit claims. The suit seeks an injunction to prevent Blue Shield from taking such action in the future. KPBS Reporter Kenny Goldberg has more.
Blue Shield admits it's canceled some 300 policies over the last two years. Company officials argue the law allows insurers to terminate a policy, if a patient lied or even made a mistake on their application. Attorney William Shernoff filed the lawsuit seeking an injunction against the practice.
Shernoff: It is a widespread practice. It's unfair, in many cases it's outrageous, and somebody has to stop it, whether it's the courts, or the Department of Insurance, we have to put a stop to it."
The State Insurance Commissioner says his department is looking into Blue Shield's behavior. State regulators recently fined Blue Cross for illegally canceling a woman's policy. Kenny Goldberg, KPBS News.
