I saw this a few days ago, but I'm still trying to rest during the holiday....Atrios:

California health insurers have a duty to check the accuracy of applications for coverage before issuing policies -- and should not wait until patients run up big medical bills, a state appeals court ruled Monday.

The court also said insurers could not cancel a medical policy unless they showed that the policyholder willfully misrepresented his health or that the company had investigated the application before it issued coverage.

"These facts raise the specter that Blue Shield does not immediately rescind health care contracts upon learning of potential grounds for rescission, but waits until after the claims submitted under that contract exceed the monthly premiums being collected," the court wrote.

A health plan, the court went on, "may not adopt a 'wait and see' attitude after learning of facts justifying rescission." The court said companies could not continue to "collect premiums while keeping open its rescission option if the subscriber later experiences a serious accident or illness that generates large medical expenses."...read on

The courts have caught on to their con game and it's starting to unravel...