Debate Over Health Insurance Cancellations Brings Criticism, Suggestions From All Sides

In a California Healthline Special Report, stakeholders in the debate over health insurers’ ability to rescind policies offered their ideas for how to best regulate the practice.

The Special Report includes comments from:

  • Jerry Flanagan of Consumer Watchdog;
  • Sen. Sheila Kuehl (D-Los Angeles);
  • Lynne Randolph of the Department of Managed Health Care; and
  • Robert Zirkelbach, a spokesperson for America’s Health Insurance Plans.

Because the consequences of a canceled health insurance policy can be so severe for consumers — leaving patients with thousands of dollars in medical bills they thought insurance would cover — the issue is drawing much attention from the industry, lawmakers and advocacy groups.

Under California law, health insurers can legally cancel policies only if patients have deliberately lied about their health status on their applications. How to determine if a misrepresentation was deliberate — and who gets to make that decision — is a central issue in the debate.

DMHC has doled out fines to big insurers in California for improper policy cancellations, and hundreds of consumers have complained about having their policies unfairly canceled. The department is in the process of investigating health insurance companies’ cancellation practices (Kennedy, California Healthline, 3/31).

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