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April 11, 2008

Two health-care rescission bills make way through Assembly

The battle over how and when health plans can cancel a patient's insurance policy returned to the Capitol this week as two key pieces of legislation cleared the Assembly Health Committee.

At issue are the rules health insurance companies must abide by before they cancel a patient's health care coverage.

"In the five years that we have records, there have been about 700 rescission per year," says Hector De La Torre, D-South Gate, author of one of the bills passed out of Health Committee this week. "This bill would make it so those rescissions would have to be reviewed by a third party before they can happen."

Under current practice, health plans have the authority to unilaterally rescind a policyholder's insurance if they find there has been a "willful misrepresentation" of the patient's medical history on their initial health care application. De La Torre's bill would force health plans to seek approval from a third-party arbiter before an enrollee's health insurance policy can be revoked.

A number of high-profile cases in recent years have found that health insurance plans have improperly revoked policies from insurance holders for accidental omissions on their health insurance applications.

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Posted by healthinsurance at April 11, 2008 05:43 PM