Posted May 07, 2007 06:16 pm CDT
A case pending before a California appeals court contends Blue Shield of California suddenly canceled coverage for a policyholder, resulting in delayed surgery and lasting injury.
At issue is whether the cancellation was justified under a state law permitting rescissions for “willful misrepresentation.” The outcome could influence the way insurers do business in the state and spur reform efforts, according to the Los Angeles Times.
Blue Cross argues it had a right to cancel coverage because the policyholder listed his weight at 240 rather than his actual 285 pounds, and he failed to disclose treatment for headaches and high blood pressure. Blue Cross is seeking more than $100,000 for the medical bills it has already paid.
Plaintiff Steven Hailey says he postponed surgery for an injured urethra caused by a car accident after Blue Cross stopped coverage. The delay caused his bladder to stop working, his suit contends.