Few Californians Participating in Coverage Rescission Settlements
Fewer than 300 of the 6,000 Californians who were dropped from their health plans after being diagnosed with a serious condition have taken advantage of settlements that state officials have reached with the stateâs five largest health insurers, according to a new report scheduled to be released today, the Los Angeles Times reports
Bryan Liang, director of the Institute of Health Law Studies at the California Western School of Law, prepared the report for the Assembly Committee on Accountability and Administrative Review. Committee members are expected to discuss the findings during a hearing today (Girion, Los Angeles Times, 3/10).
Background on Settlements
In 2008 and 2009, the departments of Managed Health Care and Insurance reached settlement agreements requiring five major insurers to offer new coverage to consumers whose coverage had beenÂ improperly rescinded between 2004 and 2008.
The settlements affected individual policyholders who had their coverage rescinded by:
- Anthem Blue Cross of California;
- Blue Shield of California;
- Kaiser Permanente; and
- PacifiCare of California (Colliver, San Francisco Chronicle, 3/10).
The settlements did not require the insurers to admit wrongdoing, but they did impose fines on some health plans (Tayefe Mohajer, AP/San Jose Mercury News, 3/10).
According to Wednesdayâs report, only 5% of consumersÂ whose policies wereÂ rescinded have accepted new coverage under the settlements.
The report also found that fewer than 3% of affected consumers have participated in a process to recoup funds for medical expenses incurred after their coverage had been dropped (San Francisco Chronicle, 3/10).
The report concluded few people have sought new coverage because the settlements were overly complicated and the cost of the new coverage was too high (Los Angeles Times, 3/10).
Hearing To Question State Regulators
On Wednesday, the Assembly Committee on Accountability and Administrative Review is scheduled to hold a hearingÂ to question officials from DMHC and the Department of Insurance about the low consumer participation rates for the settlements.
Some lawmakers have criticized state regulators for not taking sufficient steps to help affected residents regain coverage.
DMHC said it sent letters informing 3,366 affected consumers about the settlements, but only 177 of the letters led to new coverage and only 92 consumers sought reimbursement for out-of-pocket expenses.
Department spokesperson Lynn Randolph said low participation is not unusual, adding that the agency also aired public service announcements and made other efforts to contact consumers (Calvan, Sacramento Bee, 3/10).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.