Consumer Watchdog Praises CA HMO Regulator's Promise to Reinstate Health Coverage for Wrongfully Cancelled Patients; Cautions That All Health Costs During Gap Must ...( SANTA MONICA Calif. April 17 -- ...),Health

SANTA MONICA, Calif., April 17 /PRNewswire-USNewswire/ -- Consumer Watchdog today praised a California state regulator's efforts to begin reinstating the insurance coverage of patients left uninsured, uninsurable and often hundreds of thousands of dollars in medical debt when their health insurance policies were illegally cancelled after they got sick. The nonprofit consumer group also cautioned that reinstatements must be complete and retroactive, with no gap in coverage from when the policy was issued to the time it was restored.

On Monday, Consumer Watchdog petitioned the state Department of Managed Health Care to announce within 10 days its plans regarding reinstatement of thousands of patients affected by the illegal practice.

"This a landmark step on the road to justice for the thousands of innocent patients whose health insurance was retroactively cancelled. Today's announcement applies to only 26 people, but the same law used here will provide reinstatement for thousands more. We look forward to working with the Department," said Jerry Flanagan, Health Care Policy Director for Consumer Watchdog. "However, we caution that reinstatement must be retroactive to the time of the policy cancellation, and health insurers must be liable for all health expenses from the date of issuing the contract through the date of reinstatement. We also very concerned about the state's plan to subject the remaining thousands of cases to unnecessary and lengthy 'third-party reviews' before restoring their coverage."

A recent survey of Blue Cross of California by the Department of Managed Health Care found that in 90 out of 90 retroactive policy cancellations -- known as "rescissions" -- that it examined, Blue Cross failed to show that a patient "willfully misrepresented" a known health condition when applying for coverage. Such "willful misrepresentation" is the only legal grounds for rescission.

In a number of cases made public, policies
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