Schwarzenegger administration to join legal battle against health insurer

The Schwarzenegger administration will once again intervene — this time with the state Supreme Court — on behalf of a man who sued Blue Shield for illegally dropping his health insurance after he was permanently injured in a car accident.

The Department of Managed Health Care has summoned representatives from the state’s five largest health insurance providers to Sacramento Wednesday to tell them it intends to file an amicus brief against Blue Shield. The state regulators intend  to explain to health insurers the department's view of how the recent appellate court decision in the Hailey case has fundamentally altered health insurance policy and regulation in California.

Administration sources say they plan to  use Wednesday's meeting to persuade industry officials to come up with new policies regarding unlawful rescissions of customers' health insurance.    

Last year, the Department of Managed Health Care found that Blue Cross illegally dropped 90 customers from their insurance rolls only after those patients made insurance claims. The department is close to winding up investigations into complaints against four other health plans – Blue Shield, Kaiser, PacificCare and HealthNet – in the coming weeks.

The meeting "is part of our ongoing investigation into the five largest health plans," said DMHC spokeswoman Lynne Randolph. "The focus of the meetings is to conclude these investigations quickly, and provide consumers with immediate relief from health plan rescission policies.

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