Assembly Passes De La Torre Legislation To Curb Wrongful Health Rescissions

Main Category: Public Health
Article Date: 09 Jun 2009 - 5:00 PDT

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The California State Assembly passed Assemblymember Hector De La Torre's (D-South Gate) Assembly Bill 2 that prevents the insurance industry from unfairly rescinding patients' healthcare policies without oversight from a state regulator with a 46-24 vote.

For the last two years, De La Torre has played a lead role in the Capitol in preventing wrongful rescissions from insurance companies and protecting consumers from being stranded by their healthcare provider when they need coverage the most. Last year's bill, AB 1945, passed both the Senate and the Assembly with bipartisan support but was vetoed by Governor Schwarzenegger.

"The insurance industry has made billions by unfairly canceling health policies, with little to no oversight prior to canceling patient's insurance coverage," said De La Torre. "Our current system is flawed. People who get sick deserve to get coverage for services that they paid for and anything less is unacceptable."

Assembly Bill 2 will require individual health care service plans to be subject to an independent automatic external review before denying or rescinding coverage. The bill requires the Department of Managed Health Care (DMHC) and the Department of Insurance (DOI) to jointly establish standard information and health history questions to be used on applications. AB 2 also requires all plans to complete medical underwriting prior to issuing a contract.

"Californians need health care coverage they can rely on when they get sick," Dr. Dev Gnanadev, M.D., president of the California Medical Association said. "Insurance companies in California have a long track record of rescinding health coverage after people get sick. AB 2 would protect patients from being stranded when they need it most. We look forward to working with Assembly member De La Torre and the Governor to ensure that Californians with health insurance have coverage they can count on."

Assemblymember De La Torre first introduced the legislation to address growing criticism of insurers by physicians, patients and healthcare advocates. Ever since, a growing number of investigations have revealed a practice by insurers of dumping sick patients.

Since last year, the DMHC restored coverage for over 1,000 Kaiser Permanente consumers and 85 Health Net consumers due to unfair rescissions. DOI has also restored coverage for 2330 Anthem Blue Cross consumers and almost 700 Blue Shield consumers due to unfair rescissions.

Assemby Bill 2 now moves to the Senate.

Source
The California State Assembly