WellPoint To Pay L.A. $6M To Settle Rescission Lawsuit

WellPoint has agreed to settle a lawsuit brought by the city of Los Angeles that alleged the insurer improperly dropped people from coverage when they got sick.

Los Angeles Times: Insurance Giant WellPoint Agrees To Pay $6 Million In L.A. Case
Insurance giant WellPoint Inc. has agreed to pay $6 million to resolve allegations that the company improperly dropped policyholders after they got sick and needed treatment. The settlement announced Thursday by Los Angeles City Atty. Carmen Trutanich caps a long-running investigation into so-called rescissions by several insurers in the state (Terhune, 6/20).

The Associated Press: LA Settles Health Insurance Lawsuit For $6 Million
The settlement is far less than the $1 billion in fines and restitution former Los Angeles City Attorney Rocky Delgadillo threatened when the lawsuit was filed in 2008. At the time, Delgadillo said some of the dropped policies affected elderly patients and patients with health costs that topped $100,000. Anthem denied the allegations then, and is admitting no fault in the settlement now.The settlement took into account Anthem's steps to enhance policyholder safeguards (6/20).

This is part of Kaiser Health News' Daily Report - a summary of health policy coverage from more than 300 news organizations. The full summary of the day's news can be found here and you can sign up for e-mail subscriptions to the Daily Report here. In addition, our staff of reporters and correspondents file original stories each day, which you can find on our home page.