Friday, April 18, 2008

California to review canceled health insurance policies

The action, which affects thousands of Californians, is the boldest yet in dealing with companies' practice of rescinding coverage of sick policyholder

Go to Los Angeles Times original
Thousands of people whose policies were canceled by California health insurers will have a chance to win back their coverage and be reimbursed for outstanding medical bills, the Schwarzenegger administration announced Thursday.

The state's action is the boldest yet in dealing with the industry's increasingly controversial practice of canceling individual coverage - known as rescission - after patients have taken ill and submitted medical bills.

Cindy Ehnes, the director of the Department of Managed Health Care, said she would reopen policies dropped over the last four years by the state's five major insurers and submit them for reconsideration to an independent arbiter.

Those determined to have been wrongly canceled would be reinstated, and the insurers would be responsible for medical bills incurred while patients were without coverage, she said.

"Rescission is a harsh practice," Ehnes said. "It strips people of coverage and causes them to be uninsurable at the very time they need it most. For the first time, we are giving people a second chance to get that health coverage. We are putting our full regulatory and enforcement action to work on this. We are opening the door to health coverage for those thousands of Californians who have been impacted over the last four years."


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