Insurance giant WellPoint Inc. has agreed to pay $6 million to resolve allegations that the company improperly dropped policyholders after they got sick and needed treatment.
The settlement announced Thursday by Los Angeles City Atty. Carmen Trutanich caps a long-running investigation into so-called rescissions by several insurers in the state.
“Patients with health insurance have a right to expect meaningful coverage when they need it most -- when they are ill and in need of medical treatment,” Trutanich said.
Starting in 2006, a series of Times articles, regulatory investigations and lawsuits showed that insurers rescinded coverage for some consumers with expensive medical needs without regard for whether they intended to deceive companies about preexisting medical conditions on their applications.
In 2010, the federal healthcare law included a ban on rescissions for unintentional application errors and that provision went into effect that year.
Anthem Blue Cross, a unit of WellPoint, is California’s largest for-profit health insurer. The company denied any wrongdoing as part of the settlement and declined to comment further on the case.
The city attorney’s office said WellPoint has made changes in its customer application, sought third-party review for rescissions, and taken other steps to ensure compliance with laws on rescission since the city’s lawsuit was filed in 2008.
The $6-million settlement will be split between the city attorney’s office and Los Angeles County.
In 2011, Blue Shield of California agreed to pay $2 million to resolve similar allegations brought by the city attorney.