California To Enact New Rules To Curb Improper Health Plan Rescissions
On Aug. 18, California will enact new rules regulating how health insurers can rescind members' policies, Insurance Commissioner Steve Poizner (R) announced recently, the Central Valley Business Times reports.
Although existing law limits the circumstances under which health plans can rescind policies, some insurers have taken advantage of the law's ambiguity.
The new regulations aim to further clarify existing law and offer concrete steps that insurers must take before rescinding a policy.
Some of the new regulations would require insurers to:
- Limit application questions about health conditions and histories to only those required for medical underwriting;
- Require that all questions on an insurance application be clear, specific and easy to understand;
- Offer applicants the option to indicate that they are unsure or cannot remember the answer to a health history question;
- Provide policyholders with a copy of their application to allow them to check for possible errors; and
- Allow members the opportunity to respond during investigations that could lead to a policy rescission.
The rules also would prevent insurers from conducting a rescission-focused investigationÂ long after becoming aware of a possible misrepresentation or omission on an application (Central Valley Business Times, 8/5).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.