Governor Vetoes Rescissions Bill, Other Health Care Measures

On Tuesday, Gov. Arnold Schwarzenegger (R) vetoed legislation (AB 1945) that would have prohibited health plans from rescinding health insurance policies unless they could prove that consumers intentionally misrepresented information on their applications, the AP/Sacramento Bee reports.

The legislation, introduced by Assembly member Hector De La Torre (D-South Gate), also would have created an independent review process for each rescission case (Tayefe Mohajer, AP/Sacramento Bee, 9/30).

The measure, sponsored by the California Medical Association, received bipartisan support in the Assembly but passed with just one Republican vote in the Senate (Howard/York, Capitol Weekly, 9/30).

In a memo to lawmakers, Schwarzenegger called the practice of rescission "deplorable" but said he vetoed the measure because it lacked several consumer protections and was "written by attorneys that stand to benefit from its provisions" (AP/Sacramento Bee, 9/30).  Schwarzenegger said several provisions, such as additional patient protections and standardized health care applications, should have been in the bill (Capitol Weekly, 9/30).

Reaction

De La Torre disputed Schwarzenegger's criticisms, noting that the family protection provision cited by the governor was left off the measure because it was included in another bill (AB 2569) that the governor approved.  

"The governor is not fulfilling his obligation to the insured population of California," De La Torre said.

William Shernoff, a leading attorney in rescissions lawsuits, said the veto "is going to mean business as usual for the insurance companies, which means continued rescissions and more litigation," adding, "The insurance lobby is very powerful in this state, and they got what they wanted, to not have a law that would clarify the situation."

Christopher Ohman, president of the California Association of Health Plans, commended Schwarzenegger's veto of the measure. He said, "Rather than offer consumers real legal protections from unfair rescission or cancellation, [the bill] would have invited dishonesty on applications and [led] to price increases and reduced coverage in the individual market" (AP/Sacramento Bee, 9/30). 

Vetoes of Other Health Care Measures

On Tuesday, Schwarzenegger also vetoed SB 840 by Sen. Sheila Kuehl (D-Santa Monica). The measure would have created a state-run, single-payer health care system in California.

In his veto message, Schwarzenegger said he could not support "a bill that places an annual shortfall of over $40 billion on our state's economy."

In addition, the governor vetoed a measure (SB 981), by Senate President Pro Tem Don Perata (D-Oakland), aimed at addressing the practice of balance billing. The measure would have prohibited emergency department physicians from billing patients directly when there are billing disputes with their HMOs.

In his veto statement, Schwarzenegger said the bill would have rewarded "non-contracting physicians by assuring their continued financial slice of the pie" without fixing the state's "broken health care system" (Rojas, Sacramento Bee, 9/30).

Broadcast Coverage

On Tuesday, KQED's "Radio News" included a discussion with Sacramento bureau chief John Myers about bills the governor signed and vetoed (Musiker, "Radio News," KQED, 9/30).

Capital Public Radio also reported on the veto of AB 1945 (Weiss, "Capital Public Radio," 10/1).