Catherwood LibraryILR School

A judge ruled Thursday that health insurer Blue Shield had acted properly and legally in their decision to rescind the health coverage of Steve and Cindy Hailey after Steve was in a car accident. The couple's coverage was rescinded in 2001, following Steve's accident, for an unrelated omission of a pre-existing condition found on the Hailey's application. The Hailey's have been fighting Blue Shield ever since, until a sudden reversal of position, a confession of their willful misrepresentation of Steve's condition with a full understanding of the application, led to an unexpected ending to the case, even as it was underway. In a direct ruling, the presiding judge ruled that Blue Shield was in the right, and there was insufficient evidence from the Hailey's. This was only the second court case dealing with the fairly common practice of rescission and indicated a step in the opposite direction from the first, which favored the client over the insurer.