"Anthem Blue Cross is pleased to have reached agreement," President Leslie Margolin said. "This resolution allows us to continue to build stronger working relationships with the DMHC and we look forward to coming together in a more collaborative way to address the healthcare needs of Californians."
Blue Shield's Tom Epstein said the company recognized that "rescission of a health coverage agreement is a serious matter that has significant consequences. . . . We have treated these issues with the utmost care and have rescinded about one-tenth of 1 percent of our individual health plan contracts since 2004.
"As a not-for-profit health plan committed to access to coverage for every Californian, we have always tried to do the right thing," he said.
Going forward, the companies agreed to develop new applications for individual coverage that are easier for consumers to understand.
Ehnes said Thursday that the size of the fines for Blue Cross and Blue Shield reflected the additional hardship on canceled consumers caused by their reluctance to come to speedy resolutions.
"We've again accomplished a result that consumers could not get otherwise -- guaranteed issue coverage, a process for full monetary losses and no back premiums owed," she said.
Gov. Arnold Schwarzenegger, who appointed Ehnes, praised the agreements.
"As I've said before, patients should not live in fear of unfairly losing their healthcare coverage when they need it most -- and I look forward to working with the Legislature to ensure this egregious practice is put to an end," Schwarzenegger said in a statement.
The settlement came the same day that a congressional committee held a hearing on the cancellation practices of the nation's health insurers and the day after Los Angeles City Atty. Rocky Delgadillo contended in a lawsuit that Blue Shield routinely flouted the law by conducting secret and unfair investigations into members' health histories to find a pretext for dropping them. Delgadillo filed similar suits against Blue Cross and Health Net this year.
"These settlement agreements add up to a raw deal for California consumers courtesy of the DMHC," Delgadillo said. "They will not make the victims of this insidious practice whole, they will not require that the companies disclose their wrongdoing, and, in my opinion, they will not adequately punish the companies for their shameful conduct."
