Assembly Panel OKs Legislation on Health Policy Cancellations
This week, the Assembly Health Committee approved two bills that would reform how and when health plans can cancel individual members' health insurance coverage, Capitol Weekly reports.
AB 1945 by Assembly member Hector De La Torre (D-South Gate) would require health plans to obtain approval from a third party before canceling a member's coverage.
Under current law, health plans have unilateral authority over canceling health coverage and can cancel a policy if it finds "willful misrepresentation" of the member's medical history on the policy application. The law has created a number of cases where patients' health coverage was canceled because of unintentional omissions on their applications.
The Department of Managed Health Care currently is reviewing the cancellation practices of five major HMOs, including Blue Cross of California, and will release its findings in the next few weeks, the Weekly reports.
AB 2549 by Assembly member Mary Hayashi (D-Castro Valley) would give health plans six months from the date of issue to review patients' policy applications and decide if there are any errors. After six months, the insurers would not be able to cancel coverage.
Nicole Evans, a spokesperson for the California Association of Health Plans, said insurers already are reforming their cancellation processes and making them more transparent. Evans said CAHP is not formally opposing either bill at this time.
Sen. Sam Aanestad (R-Grass Valley) said he is opposed to government regulation but would like to see alterations in the way cancellation cases are dealt with and regulated.
At the committee hearing on Tuesday, Chair Mervyn Dymally (D-Compton) suggested merging the two bills, an option that Hayashi said she was not opposed to (Howard/York, Capitol Weekly, 4/10).