Anthem Blue Cross and Blue Shield of California will pay regulators $13 million to settle claims that they unlawfully cancelled policies of patients who submitted medical bills. The agreement with the Department of Managed Health Care also requires the insurers to offer new coverage and reimbursement of medical expenses to every eligible member who has been rescinded since 2004, according to a Blue Shield statement.

More precisely, Anthem Blue Cross will pay $10 million and reinstate coverage for 1,770 enrollees while Blue Shield of California will pay $3 million and reinstate coverage for 450 enrollees. In a statement, Gov. Arnold Schwarzenegger applauded the agreements with the two insurers. Health Net of California, PacifiCare and Kaiser Permanente have already reached similar settlements.

Director Cindy Ehnes said the settlements send the message "that if you come into California and sell health insurance, you must play by the rules."

In February, it was revealed that Blue Cross, the largest health insurer of its kind in California, has asked physicians across the state to report any “material medical history” their patients didn’t mention when they applied for insurance, including “pre-existing pregnancies.”

At the time, doctors were outraged that they were actually asking them to violate the sacred trust of patients and to basically rat them out of medical information that patients would expect their doctors to handle with the utmost secrecy and confidentiality.