9.4 Million Dollar Bad Faith Judgment

It is the first of its kind ruling against Big Insurance. Health Net says after a $9.4 million dollar judgment, it got the message and will stop canceling health policies. The change in direction stems from the case of 52-year old hairdresser, Patsy Bates who was suffering from breast cancer, diagnosed in 2004. 

A salesman had signed Bates up for the policy, even though she already had coverage. She thought Health Net would cover her surgery and chemotherapy. But after two chemo treatments the insurer stopped paying.  

Bates had $129,000 in unpaid medical bills and since she couldn’t afford it, doctors stopped treating her.

“I was devastated. I didn’t know what was going to happen,” Bates told ABC News. “It’s boggling that someone can do that to you.”

Bates sued her insurer and Friday a California judge ordered Health Net to pay her the amount which includes $8 million in punitive damages.

In the landmark ruling, the outraged judge wrote: “She had valid health insurance … when the rug was pulled from underneath, and that occurred at a time when she is diagnosed with breast cancer, one of the leading causes of death for women.”

Judge Sam Cianchetti called Woodland Hills-based Health Net’s actions “egregiousin a 21-page ruling. And he said they acted in bad faith, had no concern for the interests of the insured and broke state law.

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