Assembly Passes Bills Targeting Health Policy Rescissions

Reacting in part to a long-broiling controversy and several class-action lawsuits, the state Assembly passed two bills this week aimed at limiting the circumstances in which insurance companies can rescind health insurance coverage.

AB 2549, by Assembly member Mary Hayashi (D-Castro Valley), would not allow health plans to rescind coverage after a member has been insured for six months; and
AB 1945, by Assembly member Hector De La Torre (D-South Gate), would require health plans to gain approval from an independent agency before rescinding coverage.

The Assembly's vote came with a backdrop of court and government action. Earlier this month, the administration of Gov. Arnold Schwarzenegger (R) announced settlements between the state and two health insurance companies that Department of Managed Health Care Director Cindy Ehnes said will allow hundreds of patients whose policies were rescinded to buy insurance again and recoup up to $15,000 in medical expenses.

But critics say the agreement lets insurance companies off the hook, paying just pennies on the dollar, with Jerry Flanagan, a health care activist for Consumer Watchdog, arguing that medical bills are at least $100,000 for most people whose coverage was rescinded.

How these bills will fare in the Senate remains to be seen. In the meantime, here's a snapshot of recent legislative activity on other health care bills. This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.