Health insurer rewards dropping sick policyholders.

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"Health insurer rewards dropping sick policyholders."

Woodland Hills-based Health Net Inc., one of the largest health insurers in California, “set goals and paid bonuses” for employees “based in part on how many individual policyholders were dropped and how much money was saved.” Between 2000 and 2006, the company “avoided paying $35.5 million in medical expenses by rescinding about 1,600 policies” while paying “its senior analyst in charge of cancellations more than $20,000 in bonuses based in part on her meeting or exceeding annual targets for revoking policies.”

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