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Health Net Hit With $25 Million in Fines and Penalties

One of California's largest health insurers has agreed to give new policies to hundreds of people whose coverage was improperly canceled. Health Net will also pay 25 million dollars in reimbursements

Health Net Hit With $25 Million in Fines and Penalties

One of California's largest health insurers has agreed to give new policies to hundreds of people whose coverage was improperly canceled. Health Net will also pay 25 million dollars in reimbursements and penalties for terminating policies after people got sick. KPBS Reporter Kenny Goldberg has more.

Health Net has admitted paying an employee bonuses based on how many policies they terminated.

The company has agreed to reinstate 926 policies and pay up to 14-million dollars in medical charges they had previously refused to cover.

Jerry Flanagan is with the non-profit group Consumer Watchdog . He says the deal leaves a lot to be desired.

Jerry Flanagan: The settlement specifically said Health Net can rescind coverage in the future, without clarifying what the legal standard is, what the standard is for those rescissions.

A bill on the governor's desk would prohibit an insurer from terminating policies, unless it found people had intentionally lied on their application. Governor Schwarzenegger has not said whether he will sign it.

Kenny Goldberg, KPBS News.

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