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De La Torre targets health insurance cancellations

February 19, 2010 |  2:35 pm
With today's deadline to introduce new bills in the Legislature, Assemblyman Hector De La Torre (D-South Gate) has reintroduced a bill to stop health plans from retroactively canceling a customer's health insurance policy. The practice, know as rescission, has been the subject of bills for the last two years. Both times, it has passed the Legislature and been vetoed by Gov. Arnold Schwarzenegger.

De La Torre's bill, AB 2470, would require the Department of Managed Care and the Department of Insurance to establish standards for canceling patients' care and require health plans to perform patient underwriting before a new patient is granted insurance.

“The insurance industry has made billions of dollars by unfairly canceling health policies, with little to no oversight prior to canceling the policies. While I am grateful that regulators are beginning to challenge insurer’s actions, in many cases the penalties have been a minor slap on the hand for this multimillion dollar industry,” said De La Torre. “The damage felt by consumers, many of them sick, are monumental. We need strong enforcements to create real disincentives for denying coverage.”

--Anthony York