2 health plans settle with Calif. for $13M

SACRAMENTO, July 18 (UPI) -- Two healthcare plans have agreed to pay $13 million and offer coverage to more than 2,000 Californians dropped after they became sick, state officials said.

Anthem Blue Cross and Blue Shield -- two of California's largest health plans -- admitted to any wrongdoing in agreeing to pay the penalties levied by state authorities, the Los Angeles Times reported Friday.

State health officials have been investigating what they view is an abusive practice of healthcare plans' investigating and canceling policies after policyholders incur large medical bills.

Anthem Blue Cross agreed to pay a $10 million fine to the state Department of Managed Health Care, and will offer new coverage to 1,770 former members dropped since 2004. Blue Shield will pay $3 million and offer new policies to 450 people whose coverage was rescinded during the last four years.

The state's action "sends the message that if you come into California and sell health insurance, you must play by the rules," department Director Cindy Ehnes said.

The department investigated coverage cancellation affecting policies individuals buy on their own after a Times series reported on the issue.

Kaiser Permanente, Health Net and PacifiCare made similar agreements earlier this year, Ehnes said.