Ca: State to review cases where people got dropped from health insurance after getting sick and submitting bills

This follows the story I published on (2/23/08): Health Net ordered to pay $9 million after canceling cancer patient's policy

From The LA Times (4/18/08):
Hope for patients who lost insurance policies
A state review will give many whose insurance was canceled during treatment a chance to get it back.
By Lisa Girion and Marc Lifsher, Los Angeles Times Staff Writers

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."

Ehnes' department, Insurance Commissioner Steve Poizner, Los Angeles City Atty. Rocky Delgadillo, lawmakers and the courts are all scrutinizing the practice.

Those efforts gained steam in February when the first judgment in a rescission case awarded $9 million to a breast cancer patient whose coverage was canceled during chemotherapy. Health Net Inc., the insurer in that case, and Kaiser Permanente have voluntarily stopped canceling patients while awaiting guidance from authorities.

An industry spokesman said insurers have been making changes in an effort to restore confidence in the affected individual market, where consumers without access to employer-based or other group coverage can buy their own policies.

Christopher Ohman, president of the California Assn. of Health Plans, said, "On their own, health plans have been implementing new policies to strengthen and make more transparent the process for rescinding policies."
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Found via
The Man Common News

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