Regulatory Chief Backs Independent Review of Policy Cancellations
Department of Managed Health Care Director Cindy Ehnes said that health plans could be required to seek external input before canceling individual policyholders' coverage, the Los Angeles Times reports. Ehnes said she has not developed details, but the external review could come from the department or from an independent panel.
Insurers likely will oppose the proposed independent review.
The announcement came after a public meeting on how the agency can prevent insurers from canceling a policyholder's coverage after a claim has been submitted.
Ehnes said state law prohibits insurers from rescinding individual policyholders' coverage unless they can prove that the individual intentionally lied about their medical history.
However, insurers maintain that they can rescind coverage based on any omission from an application for coverage, even if the omission is inadvertent.
Ehnes said her decision reflects Gov. Arnold Schwarzenegger's (R) health care reform proposal, including a provision that would require insurers to sell coverage to anyone.
DMHC currently is investigating policy cancellation practices of Blue Cross of California, Blue Shield of California and Kaiser Permanente (Girion, Los Angeles Times, 1/30).