Report: Bonuses paid for dropping sick patients

A health insurance company serving customers in a half-dozen states set out to drop hundreds of customers and paid lucrative bonuses to an executive in charge of eliminating coverage.

One customer is suing the company, Health Net Inc., after a company salesman pressured her to switch to a Health Net plan only for the company to cut-off her coverage in the middle of costly cancer treatment.

California small-business owner Patsy Bates was one of more than 1,600 customers who had their Health Net policies rescinded between 2000 and 2006 saving the company $35.5 million, the Los Angeles Times reports. Over the same period the senior Health Net analyst in charge of canceling policies received more than $20,000 in bonuses based in part on her meeting annual targets for revoking the coverage.

Bates, who owns a beauty salon outside Los Angeles, is suing the company because it canceled her insurance when she was in the middle of chemotherapy treatments for breast cancer. She alleges the company acted in bad faith and left her with $200,000 in unpaid medical bills while she remains unable to continue the cancer treatment.

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