A California appellate court has ruled that consumers with individual health policies can file class action suits against insurance companies who wait to review applications and then revoke coverage after a policyholder becomes sick. The appeals court also held that if an insurer fails to properly attach a copy of the policy to an individual's application, it loses the right to rescind a policy retroactively, regardless of the accuracy of the initial application.
Consumer advocates are hailing the ruling as an important protection for individual policyholders. For example, Dr. Richard Frankenstein, president of the California Medical Assn., told the Los Angeles Times that "Hopefully, the courts are showing that they understand the importance of fairness to people who have tried their best to meet their obligation to have their healthcare paid for."