Blue Shield drops harsh cancellation policy


They went back and forth on this issue and it quickly turned into a nightmare for /*Blue Shield*/. Then on Wednesday afternoon, the company sent ABC7 an email saying in light of all the feedback from members, they are now going back to their old policy -- meaning nothing has changed.

Blue Shield policyholders like Kevin Epstein were put on notice and told if their insurance payment is made after the due date, they may be declined coverage.

"Maybe it's the season, but based on the season, I think, the Grinch came early this year," said Epstein.

The letter sent to individual policyholders also stated that if their policy was canceled, clients would have to re-apply for coverage and if the policy is resumed, different premiums may apply.

"Instead of viewing the subscribers as real people with real needs who have paid for that coverage, I think Blue Shield may be viewing us as disposable," said Epstein.

However, the California Department of Insurance says the law is clear in saying every policyholder must be given a grace period.

"If your premiums are paid monthly, there must be at least a 10-day grace period and if the premiums are paid annually, there must be at least a 31-day grace period," said Jason Kimbrough from the California Department of Insurance.

Blue Shield now says it neglected to mention a grace period in that letter.

In fact, Blue Shield has always offered a 28-day grace period.

On Wednesday, because of all the media attention and complaints from clients, the company said it would go back to the old policy: "In addition to the 28 day grace period, we will continue to allow members to ask to be reinstated for an additional 15 days."

Blue Shield said it will now send out clarification letters shortly to all members.

The new policy would have affected thousands of people.

It was a surprising decision from an insurance company which has been an advocate of universal coverage.

In 2002, Blue Shield was the first health insurer in the country to propose a specific plan for universal health coverage and its CEO even testified last year in Congress.

So again, for those who have Blue Shield disregard the letter, nothing has changed.

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