Rescission and the Cancellation of Insurance is Still a Lingering Threat

Rescission is a term health insurers use when they talk about the retroactive cancellation of an insurance policy. Under federal law, a company may rescind an insurance policy if they find circumstances of fraud. This usually occurs when a consumer failed to mention a pre-existing medical condition.

While rescission is perfectly legal in an actual case of fraud, this is also a tactic that insurance companies may use to avoid paying costly claims.

In a 2007 class action lawsuit filed against Blue Cross of California, approximately 6,000 policy-holders made claims against the insurer for the illegal cancellation of insurance.

The plaintiffs claimed that Blue Cross rescinded their insurance policies for the wrong reasons, such as inadvertent errors on their application forms, confusion, or honest mistakes. It was alleged that Blue Cross intentionally searched for the slightest misrepresentations to avoid paying these customers' claims.

In the end, Blue Cross agreed to pay a settlement, and some of their company policies were changed. The lesson to take away from this class action lawsuit is that health insurers may still try to cheat you out of the benefits you deserve.

Browse our library to learn more about how insurance companies use rescission to avoid paying costly claims. 

The attorneys at Phillips & Garcia will fight for your rights in your health insurance class action lawsuit. We are committed to protecting your best interests and helping you collect the damages you need and deserve to move on with your life. If you have been treated unfairly or have been a victim of cancellation of insurance, contact Phillips & Garcia today to schedule your FREE legal consultation - (877) 892-5620.