United Healthcare (“UHC”), the largest health insurance company in America, was found by the California Department of Insurance to have committed over 900,000 violations of California laws and regulations.  As a result, the California Insurance Commissioner imposed $173 million in fines.  UHC challenged the fines in court, and in early January the California Supreme Court upheld $91 million of those fines.  The remaining $82 million in fines are still pending on appeal.

According to a CNN story the California Insurance Commissioner who began the investigation was quoted as saying: “ PacifiCare [which was bought by UHC] sought to weaken consumer protections to allow insurers to escape liability when they intentionally deny expensive but life-preserving medical care.  This is an important victory for California consumers and consumers across the country.”  UHC engaged in a long legal battle with the California Department of Insurance, but the commissioner ultimately imposed the fines, which the Supreme Court recently upheld.

There are very few ways the health insurance industry can be held accountable for wrongdoing.  One of them is when an insurance commissioner is tenacious enough to take on the industry.  A fine like the one in California should very well get the attention of UHC, and in theory it would cause UHC to change its ways.  We can all hope.

The other way the health insurance industry can be held accountable is in a lawsuit filed by a policyholder with the guts and determination to fight a difficult battle, represented by lawyers who can go the distance.  While the California fines against UHC are encouraging, they amount to only about $200 per violation.  An insurance bad faith case can result in substantial amounts of money for each policyholder who brings such a case, and if the policyholder wins, he or she get compensated for what the insurance company put them through.  In some cases, a jury might even award large punitive damages to send a message to the insurance company to change its ways.

Aggressive investigation and enforcement by insurance commissioners and departments, along with bad faith lawsuits, are the only meaningful way for regular people to stand up to the power of the multi billion-dollar insurance industry.