Assembly Approves Measures To Tighten Rules on Rescissions

This week, the California Assembly approved two bills aimed at raising the bars for health insurers seeking to rescind individual policies, Capitol Weekly reports.

Under AB 1945 by Assembly member Hector De La Torre (D-South Gate), health plans would have to request approval from independent agencies before coverage could be rescinded.

AB 2549, by Assembly member Mary Hayashi (D-Castro Valley), would bar insurers from rescinding coverage after a member has been insured for six months.

The Assembly's approval of the bills comes on the heels of an agreement between the Department of Managed Health Care, and Kaiser Permanente and Health Net to reinstate coverage for more than 1,000 people. The agreement also includes provisions to let members whose policies were rescinded go through arbitration to recover as much as $15,000 in medical expenses arising from the rescinded policy.

However, consumer advocates argue that the settlement does not offer consumers adequate compensation and does not amply penalize insurers (Howard/York, Capitol Weekly, 5/29).