Greedy Trial Lawyer
Post-Claims Underwriting Makes Insurance Coverage Disappear
Category: Seeing Clearly Now
By the time you are 50 years old your medical history is beginning to look like a lengthy novel. But, unlike a novel, it is not neatly written in a single bound volume. It is scattered throughout the country in the records of various health care providers, hospitals, health insurance companies and laboratories. It is also poorly recorded, with major league errors and omissions, in your cluttered memory.
All of this is well known to the insurance industry. It is the underlying corporate rationale for the industry's post-claims underwriting. Your filing of a significant health insurance claim is the trigger for the medical sleuths in your insurance carrier's underwriting department to roll up their sleeves and find something, almost anything, you failed to include in your insurance application. Then, comes the announcement: If we had known this fact we would not have provided this coverage to you. Sorry. Your refund check is enclosed.
It is this despicable business practice that is the subject of an article at Law.com.
Plaintiffs Await Ruling on Canceled Health Insurance Policies
William Shernoff says he has been bringing lawsuits over canceled health insurance policies since the 1980s. Lately, however, that part of the Southern California plaintiff lawyer's practice has exploded: Last year, Shernoff filed about 70 lawsuits for people who have gotten stuck with hefty medical bills when an insurance company revoked their coverage by claiming they falsified or omitted important details on their applications. He's on pace to file about the same number this year.So far, Shernoff says, litigation over the insurance companies' practice -- often referred to as post-claims underwriting -- hasn't led to any significant case law. He said most cases end with dismissals or confidential settlements, adding that the settlements can be substantial, a point disputed by lawyers for insurers.
But next week, the Santa Ana, Calif.-based 4th District Court of Appeal will hear arguments in a closely watched case that challenges Blue Shield of California's practice of rescinding coverage based on inaccuracies in an application. If the challenge in Hailey v. California Physicians' Service, G035579, succeeds, plaintiff and defense lawyers say more cases may wind up in trial -- or lead to more lucrative settlements.
Blue Shield argues...it can rescind coverage when someone's made a misrepresentation material to the company's decision to offer them a health plan.
Plaintiff attorneys in the field contend...that a showing of willful misrepresentation is required before yanking coverage...
From Law.com
The difference between a misrepresentation and a willful misrepresentation is one that matters a lot to the insurance industry. It knows finding the former is a relatively simple and frequent occurrence. But, finding the latter...that is far from easy.
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