Bates already had health insurance when an agent from Health Net walked into her hair salon promising he could lower her monthly premiums if she would buy a policy with Health Net. The agent asked questions from the application while Bates worked on clients' hair. She answered the questions as best she could and her application was approved.
Not long after, Bates was diagnosed with breast cancer and began aggressive treatment that included surgery to remove the tumor and months of chemotherapy. The night before her surgery, a hospital administrator walked into her room and told her that the hospital could not allow her surgery to proceed because it was not authorized by Health Net. The company would only authorize the procedure if she paid the next three months of premiums immediately.
Following the surgery, Bates began chemotherapy treatment. Not long after, Bates was notified that Health Net was canceling her insurance policy, saying she lied about her weight on her application and did not disclose that she had been screened for a heart condition in the past. The rescission left Bates saddled with medical bills and forced her to suspend chemotherapy for months until she found a charity to pay for it.
Documents disclosed at Bates' arbitration hearing revealed that Health Net rewarded employees who rescinded sick patients. The company paid bonuses to employees who met cancellation goals and even commended one employee for having a "banner year" when she allowed the company to avoid "$6 million in unnecessary health expenses." Retired Los Angeles Superior court Judge Sam Cianchetti, who arbitrated Bates' case, called Health Net's behavior "egregious," saying the company "was primarily concerned with and considered its own financial interests and gave little, if any, consideration and concern for the interests of the insured."
Cases like these happen all over the country when an insurance company attempts to deny a client based on their expensive treatment. When a client has paid their premiums and becomes denied coverage or dropped from their policy, there may be an act of bad faith on the insurance company. Insurance attorneys like those at Derrick Law Firm Injury Lawyers deal with insurance companies every day. They understand the policies written and the laws these companies must abide by.
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