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Even as the latest two settlements -- with Blue Shield of California and Anthem Blue Cross, formerly Blue Cross of California -- were reached with the state over policy rescissions, the heat on health plans' practice of canceling coverage after it already has been granted intensified on other fronts.

The accumulated fines from these and other plans' settlements total $13.6 million and could be more if the plans fail to make changes to their business demanded by the California Dept. of Managed Health Care.

In the latest settlements, reached July 17, Blue Shield agreed to pay a $3 million fine, and Anthem parent company WellPoint agreed to pay a $10 million fine.

WellPoint agreed to offer coverage to 1,770 people whose policies had been rescinded. Blue Shield said it would do the same for 450 former members.

To date none of the companies involved has admitted wrongdoing, but all have agreed to change their practices around individual policy applications, underwriting and policy cancellations. In settling, the companies avoid a case-by-case review of every policy rescission over the last four years, and a potentially larger fine. Former members benefit by getting coverage sooner than if the state and health plans had wrestled over the issue in court.

The insurers have agreed to offer guaranteed issue plans without medical underwriting, and in some cases will pay for medical care received after policies were cancelled or rescinded.

Still, California Medical Assn. President Richard Frankenstein, MD, said the actions might not be severe enough to persuade plans not to "just keep doing what they've been doing."

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