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State Investigates Health Insurance Companies, Giving Back to the Little Guy

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On Wednesday, City Attorney Rocky Delgadillo announced that the city was suing Anthem Blue Cross for alleged illegal cancelations of health plan coverage. Then, on Thursday, the Schwarzenegger administration had an announcement of their own: thousands of rescinded plans of sick Californians will be investigated. It is considered to be the state's boldest move yet on issue, according to the LA Times.

Five major health insurance companies are "accused of issuing coverage without verifying the information and collecting premiums until they receive claims for significant medical care," the times reports. "Only then, critics say, do they scrutinize the applications and pull medical records, looking for discrepancies and omissions to use as a basis for rescission."

Gov. Schwarzenegger called the practice "outrageous," saying "that innocent patients have to live in fear of losing their healthcare coverage." The investigation, which will come in the form of an independent review of various cases, will begin within a month.

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