Insurer Gave Bonuses For Dropped Policies?

Patsy Bates
patsy bates

Hairdresser Patsy Bates is working through the pain -- the pain of living with breast cancer.

"I'm trying to live here, you know, I don't want to die," said Bates.

The pain of having almost $200,000 in medical bills because her insurance company, Health Net, pulled the plug on her policy right in the middle of her cancer treatment, reports CBS News correspondent Bill Whitaker.

"I had cancer, my life was on the line, and these guys did not care, did not care at all," she said.

In fact, she was in the hospital getting prepped for surgery when she first learned Health Net was dropping her.

Bates is now suing the giant insurer for $6 million, causing the company pain.

Documents Health Net was forced to hand over reveal senior analyst, Barbara Fowler, single-handedly dropped hundreds of policy holders like Bates from the rolls every year.

The shocker: the company awarded her bonuses based on how many policy holders she dropped.

The company called 2003 -- the year she dropped Patsy Bates -- "a banner year" for Fowler, for saving the company $6 million in what they call "unnecessary health care expenses."

"It has never affected how I performed my job duties," said Fowler.

Bates' attorney calls that outrageous and illegal.

Health Net fought to keep the documents secret and refused to speak to CBS News.

But in a statement released Friday Health Net called the allegations inaccurate and misleading and said that any decision to rescind a health insurance policy is based on factual information.

That is for the judge to decide.

"If they did this to me today, who are they going to do this (to) tomorrow?"

Patsy Bates says she is not giving up without a fight.