2 Calif. health insurers to pay $13M for dropping clients

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LOS ANGELES (AP) — Two of California's biggest health insurers have agreed to collectively pay $13 million and reinstate more than 2,000 insurance policies to settle claims with the state that they illegally dropped policyholders from coverage.

Anthem Blue Cross will pay $10 million and reinstate coverage for 1,770 enrollees while Blue Shield of California will pay $3 million and reinstate coverage for 450 enrollees. Both insurers will also reimburse policyholders for any outstanding medical debts that resulted from loss of insurance.

"This fine sends the message that if you come into California to sell health insurance, you must play by the rules," said Cindy Ehnes, the director of the state's Department of Managed Health Care.

Both companies denied any wrongdoing in rescission practices, the industry's term for dropping patients from coverage when they try to make claims on their health insurance policies.

USA Today