Health Net slapped with obscene fine for trying to offer competively priced health insurance
American life
God, I'm glad we don't have socialist healthcare in this country: Associated Press (23-Feb-08), Insurer fined $9M for dropping cancer patient: Cancellation had left woman with more than $129,000 in unpaid bills, MSNBC.com (accessed 23-
Here's a story that'll frost your free-enterprise heart. Health Net is – or possibly was – one of California's largest insurers, providing healthcare coverage to families, so they can 'Get the most out of their lives', which is a corporate goal that everyone in the commonweal can endorse. Yet, in striving to reign in premiums, Health Net ran afoul of an activist judge who entertained a meritless claim and then slapped Health Net with an obscene monetary judgment.
This is an affront to the competitive market forces that work to keep premiums low. Why should Health Net – and the families who depend on it – be responsible for the doctor bills of a woman who was perfectly able to obtain healthcare coverage under a state program?
Patsy Bates, 52, a hairdresser from Lakewood, had been left with more than $129,000 in unpaid medical bills when Health Net Inc. canceled her policy in 2004.
On Friday, arbitration judge Sam Cianchetti ordered Health Net to repay that amount while providing $8.4 million in punitive damages and $750,000 for emotional distress.
"It's hard to imagine a situation more trying than the one Bates has had to endure," Cianchetti wrote in the decision. "The rug was pulled out from underneath, and that occurred at a time when she is diagnosed with breast cancer, one of the leading causes of death for women."
Bates went on to complete her cancer treatment through a state-funded program.
The award came a day after the Los Angeles city attorney sued Health Net, claiming it illegally canceled the coverage of about 1,600 patients. City Attorney Rocky Delgadillo also said the company illegally ran an incentive program in which it paid bonuses to an administrator for meeting targets of policy cancellations.
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