Calif. Health Insurers Could Be Required To Seek External Input Before Rescinding Policies

February 3, 2007 – 11:50 am | posted in Health Insurance

California Department of Managed Health Care Director Cindy Ehnes said that health plans could be required to seek external input, possibly from the department or an independent panel, before canceling individual policyholders’ coverage, the Los Angeles Times reports. The announcement came after a public meeting on Monday to examine how the agency can prevent insurers from canceling a policyholder’s coverage after a claim has been submitted. The department is considering regulations that would prevent retroactive cancellations of individual policies. DMHC currently is investigating policy cancellation practices of Blue Cross of California, Blue Shield of California and Kaiser Permanente. Ehnes said the department’s view is that state law prohibits insurers from rescinding individual policyholders’ coverage unless they can prove that an individual intentionally lied about their medical history. According to the Times, insurers believe 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) universal health care proposal, including a provision that would require insurers to sell coverage to anyone (Girion, Los Angeles Times, 1/30). Please note: The Kaiser Family Foundation is not associated with Kaiser Permanente or Kaiser Industries.

“Reprinted with permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation . © 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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