Insurance Company Hit with Multimillion-Dollar Verdict

By Daniel Hawn

Published on March 17, 2008

Judge Sam Cianchetti on Friday ordered Health Net Inc. to pay the $129,000 in medical bills that Patsy Bates was left with after her insurance policy was cancelled in 2004. At the time, Bates had been receiving treatment for breast cancer.

Cianchetti also ordered Health Net to pay $8.4 million in punitive damages and $750,000 for Bates' emotional distress.

The verdict was delivered one day after the Los Angeles city attorney filed a lawsuit charging Health Net with illegally canceling the policies of 1,600 people. The suit also alleged that the company operated an incentive program that provided bonuses to an administrator for canceling patient policies. Health Net admitted to having such a policy in 2002 and 2003, but said it was subsequently cancelled.

In court, Bates testified that after she underwent surgery to remove a tumor and completed two rounds of chemotherapy, her doctors denied her further care because her bills were going unpaid.

Bates ultimately finished her treatment at a state-funded facility.

Following the trial, a Health Net spokesman said the company regrets what happened to Bates. He added the company is committed making the changes necessary to retain public trust.

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