Bill To Limit Insurance Policy Rescissions Heads to Governor’s Desk
On Thursday, the California Legislature gave final approval to a measure designed to limit the circumstances under which health insurance companies can revoke a patient's individual insurance policy, the Sacramento Bee reports.
The bill (AB 2) by Assembly member Hector De La Torre (D-South Gate) would:
- Create standardized information and medical history questions for policy applications;
- Establish an independent external panel to review all potential policy rescissions;
- Prevent insurers from revoking coverage unless the company demonstrates that an applicant purposefully misrepresented medical information (Sanders, Sacramento Bee, 9/11); and
- Require insurance companies to conduct medical background checks before offering coverage.
The measure also would allow the state Department of Managed Health Care and the Department of Insurance to levy administrative penalties on insurance companies that revoke coverage without obtaining prior approval.
The bill is set to take effect in January 2011 (Clark, HealthLeaders Media, 9/10).
The Legislature passed AB 2 largely along party lines, with most Democrats supporting the bill and most Republicans opposed.
Although Gov. Arnold Schwarzenegger (R) has not indicated his stance on the measure, he vetoed a similar bill last year (Sacramento Bee, 9/11).
De La Torre said his staff worked with the governor's office to resolve Schwarzenegger's objections to the earlier proposal.
The authors of the latest bill expect the governor to sign AB 2, HealthLeaders Media reports (HealthLeaders Media, 9/10).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.