Legislature OKs Bill To Curb Health Insurance Rescissions
On Tuesday, the California Legislature approved a measure designed to limit the circumstances under which health insurance companies can rescind patients' insurance policies, the Los Angeles Times reports.
Lawmakers moved to increase regulation over insurance company practices after investigations revealed that insurers had canceled coverage for thousands of California policyholders.
The bill (AB 2) by Assembly member Hector De La Torre (D-South Gate) would prohibit insurers from revoking coverage unless the company could demonstrate that an applicant purposefully misrepresented medical information.
The measure also would require insurers to conduct a complete medical background check before approving an individual's coverage.
In addition, the bill aims to clarify the insurance policy application process for consumers.
But Will the Governor Sign It?
AB 2 will go to Gov. Arnold Schwarzenegger (R) after the Assembly approves minor changes.
Although the governor has not indicated his stance on the bill, he vetoed a similar measure last year (McGreevy/Bailey, Los Angeles Times, 9/9).
Moreover, on Tuesday, Schwarzenegger threatened to veto all legislation until lawmakers take action on several of his priority issues, including energy, prison overcrowding and water.
In response, the Senate and Assembly have moved to temporarily withdraw 72 bills from the governor's desk.Removing the bills will allow the Legislature to resubmit their proposals at the close of the legislative session later this week. The governor then will have a 30-day period to act on the measures (Yamamura, Sacramento Bee, 9/9). 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.