New Regulations on Health Plan Cancellations Delayed
The Department of Managed Health Care on Aug. 28 said that it was taking longer than expected to introduce new regulations seeking to prevent insurers from improperly canceling individual health insurance policies, the Los Angeles Times reports.
In December 2006, DMHC Director Cindy Ehnes pledged to introduce regulations that would prohibit insurers from rescinding individual coverage in most cases. The department later indicated that draft rules would be unveiled in the spring.
However, Lynne Randolph, DMHC spokesperson, said it took longer than expected to investigate the five major insurers in California and develop rules that could apply to all of them (Girion, Los Angeles Times, 8/29).
Randolph said, "We don't want to put something forward that's going to be challenged (in court)" (Smith, Sacramento Bee, 8/29). She added that the department is nearing completion of the regulations and would seek adoption regardless of any health care reform measures enacted this year.
Once proposed, the rules could take up to one year to be revised and either adopted or dropped, according to the Times.
DMHC began seeking new regulations following a petition by the Foundation for Taxpayer and Consumer Rights. The group demanded that the rules require an independent review by the department before a health plan could cancel an individual policy (Los Angeles Times, 8/29).
DMHC in March completed its investigation of Blue Cross of California. The survey led to a $1 million fine for improper cancellations that violated state law. The cancellations occurred after an individual submitted a claim or received medical treatment (Sacramento Bee, 8/29).
The department still is reviewing practices at:
- Blue Shield of California;
- Kaiser Permanente;
- Health Net; and
- PacifiCare (Los Angeles Times, 8/29).