Dept. of Insurance Proposes to Halt Illegal Rescissions
The California Department of Insurance recently introduced much needed regulations that would end the illegal practice of insurers cancelling individual health insurance coverage after policyholders utilize coverage.  The practice, known as "rescission," puts patients at risk both financially and medically and leaves physicians and hospitals at financial risk for services they have rendered in good faith. 

As written, the new regulations would, among other things: stop post-claims underwriting by requiring insurers to conduct medical underwriting upfront; standardize health insurance applications to avoid confusing and ambiguous health history questions; and, require insurers before rescinding a policy to demonstrate that the policyholder knowingly misrepresented or omitted material health information on the insurance application. 

CMA believes the regulations are a good starting point, but CMA is pressing DOI to strengthen the regulations by establishing an independent review process.  CMA is also urging the Department of Managed Health Care (DMHC) to fulfill its promise to adopt similar regulations so that HMO patients have equal protection under the law.