Canceled Insurance Lawsuit
Judge orders Health Net Inc. to pay $9 million settlement after terminating a policyholder's policy after being diagnosed with breast cancer.
Canceled InsuranceLos Angeles, CA: (Feb-25-08) Patsy Bates, a 52-year-old hairdresser, found out she had breast cancer in 2004. She thought she had reliable health care coverage with Health Net, but it dropped her coverage while she was in the middle of chemotherapy. Bates was left with $129,000 in unpaid medical bills after Health Net retroactively canceled her insurance policy.
Bates sued the for profit insurer and was awarded $9 million in punitive damages. Health Net also announced it has stopped the controversial practice of canceling sick policyholdersí policies. During arbitration, internal company documents showed that Health Net was rewarding employees with bonuses based on the number of cancellations they got. Health Net made more than $2 billion in gross profit in 2007. Employees were asked to meet cancellation quotas and were also rewarded based on the amount of money they saved the company. Health Net saved more than $35 million by rescinding policyholders between 2002 and 2006. [ABC NEWS: CANCELED INSURANCE]
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