Health Net, Inc. Is Latest Insurer to Finalize Deal with California Over Rescission Practices

Health Net Inc. has now joined the growing list of health insurers to reinstate policies it canceled after policyholders got sick, reports the Los Angeles Times. In the settlement, called the first of its kind because it involved both the state Department of Managed Healthcare and the Department of Insurance, reinstated 926 policies and forces the company to pay $3.6 million in penalties and $14 million in restitution for unpaid medical bills. Heath Net admitted no wrongdoing.

Critics are calling the deal only a partial solution, and we agree. As a result of the settlement, individual policyholders with legitimate suits against Health Net may be persuaded to give up their rights to seek damages for economic losses and emotional distress.

Health Net CEO Jay Gellert calls the deal an opportunity “to move forward” and help the state overhaul the healthcare industry.

What do you think? Are these settlements letting wrongdoers off the hook by allowing them to save millions in court costs, or is it more important that insurers are allowed the flexibility to fix past mistakes and perhaps do a better job in the future?

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