A copy of her application supports her contention that she disclosed the operation, including the date and name, location and telephone number of the hospital where it was performed.
But the company's apparent error didn't stop physicians from demanding payment. The couple used almost all of an $8,000 home equity credit line to pay some of them.
But, when one physician's collection agent threatened to file a report with credit agencies over a $7,000 bill, the Riverside couple thought they had to sell their home and move in with Steve's mother in Idaho.
"I've never been that stressed out in all my life," Dawn said.
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In a suit set for trial in November, Blue Shield is accused of canceling Steve Leyra almost two years ago for failing to disclose diabetes, a condition the Fullerton man doesn't even have.
In correspondence with Leyra and in depositions, Blue Shield employees said they came to that conclusion based on a doctor's note in a chart and a prescription for a drug used for diabetes. They acknowledged that they made the decision without discussing the medication or Leyra's condition with him or his physician.
Leyra contested the decision, and his physician wrote a letter saying he had never diagnosed diabetes. "I told them, you guys are making a mistake," Leyra said.
Blue Shield stood its ground.
The cancellation scuttled a planned operation to correct a minor leg problem that prevented Leyra from running long distances.
Without it, he had to abandon plans to enroll in a firefighters' academy. Now, even if he wins his case, Leyra said, at age 40 he is too old to resurrect his dream of being a firefighter.
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Both Blues say they cancel only a small fraction of individual policies. But that may be all it takes to save big because only a small portion of policies produce high claims, said attorney Gerry Goldsholle, a former executive with Metropolitan Life in New York.
"Undoubtedly," Goldsholle said, "they had a consultant come in and say, 'You don't get killed by the little stuff; it's the big stuff that kills us. Let's go over the big claims with a fine-tooth comb.' "
Blue Cross parent WellPoint is among the most profitable health insurers. The company, which operates in 14 states, reported $751 million in net income in the second quarter, a 34% year-over-year increase. Overall enrollment rose slightly to 34 million, the result in part of the sale of nearly 200,000 individual policies in the first half of the year.
