LAT Scores on Health Insurance Scheme

The LA Times gets a nice win today in its series on health insurers.

The paper has run a series of tough stories by reporter Lisa Girion on the practice of “rescission” where insurers cancel coverage after patients get sick and require care (CJR’s Trudy Lieberman wrote about Girion’s work several months ago here).

That has prompted a state investigation, which was threatening millions of dollars in fines on Blue Shield. So the insurer settled by re-covering those whose policies it had canceled and paying any expenses they faced because of the dropped coverage.

But Girion and the Times aren’t content to wrap it up. The paper continues to press the insurer:

To obtain medical reimbursement, the settlement requires consumers to waive their right to sue Blue Shield.

That’s a bad idea, said William Shernoff, a Claremont lawyer who represents rescission victims and is pressing a class-action case against Blue Shield.

“The reimbursement of medical bills is the least amount of damages” in some cases, he said. “That’s like one-twentieth or one-fiftieth of what people are owed. While people were rescinded, they couldn’t get medical care and their medical condition was aggravated. They went into bankruptcy. Where’s the compensation for that?”

This is really solid beat coverage by the LAT—a necessary drumbeat of stories. And there’s more to come: Most of the other insurers in the state face similar investigations and lawsuits.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.