CA Legislature's 'Reform' of Health Insurance Cancellations Resembles Insurance Industry's Own Plan; Insurers, Satisfied With Getting a Legal Edge Against Patients, Drop Opposition t...( SANTA MONICA Calif. June 23 -- C...),Health

SANTA MONICA, Calif., June 23 /PRNewswire-USNewswire/ -- Consumer Watchdog warned today that a new bill to be voted on tomorrow would make it more difficult for patients to recover unpaid medical bills resulting from cancellations of coverage, even when the cancellations were illegal and unwarranted. The legislation and recent settlements with regulators are part of an industry lobbying effort to shield themselves from legal liability under the guise of reform.

AB 1945 by Assemblyman Hector De La Torre, before the Senate Judiciary Committee tomorrow, would allow regulators to outsource oversight of policy cancellations to private companies, even though such companies operate under financial incentives that favor health insurers. Last Wednesday, all health insurers and health plans removed their opposition to the bill. Consumer Watchdog said the bill should be amended to limit rescission to instances where a patient lied about a past medical condition and regulators, not third-party reviewers, should assist patients prior to the rescission being carried out.

Following several years of public and media scrutiny over retroactive policy cancellations -- so called "rescissions" -- that often leave patients uninsured and hundreds of thousands of dollars in medical debt, insurers proposed a model policy solution designed to shield them from future legal liability. That plan closely resembles the De La Torre bill.

The insurer proposal, announced in a white paper in late 2007, would require cancelled patients to appeal to an independent panel without help from an attorney.

Under both the De La Torre bill and health insurer proposals, patients would have to interpret and even try to make complex legal arguments, said Consumer Watchdog. The industry-wide strategy is to promote "reforms" containing complex proposals that favor them in legal proceedings.

"Insurers are lobbying hard in the Legislature and at regulatory agencies for a 'get
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