More proof the market can't be trusted with health insurance

From the Los Angeles Times:

California's top insurance regulator has accused Blue Shield, one of the state's largest health plans, of 1,262 violations of claims-handling laws and regulations that resulted in more than 200 people losing their medical coverage.

Calling the allegations "serious violations that completely undermine the public's trust in our healthcare delivery system and are potentially devastating to patients," Insurance Commissioner Steve Poizner said he would announce today that he would seek a $12.6-million fine.

Blue Cross complains that the violations are "for nonsubstantive issues," but for 200 people the company simply dropped their insurance rather than pay the expenses that those people had purchased the insurance for and that Blue Cross had committed to pay when required.

Those 200 are just the tip of the iceberg. California has active regulators of the insurance, and probably misses a lot more cases than they catch. Here in Texas Blue Cross would never have been caught. The regulators may be paid by state warrant, but they work for the insurance companies.