Consumer Watchdog Praises CA HMO Regulator's Promise to Reinstate Health Coverage for Wrongfully Cancelled Patients; Cautions That All Health Costs During Gap Must ...(were canceled for issues notrelated to t...),Health

Date:4/17/2008

were canceled for issues not related to the illness at hand, for instance the patient's stated weight on the application, or for omissions or errors that may have been induced by deliberately overcomplicated application forms, or for medical issues in the applicant's medical record that the applicant was not aware of or did not understand.

The DMHC announced that thousands more of the cancelled patients would have their cases reviewed by a third-party reviewer to determine whether the cancellation was lawful before coverage is reinstated.

Consumer Watchdog said such a step was largely unnecessary because the Department's own surveys found a systemic failure at Blue Cross and other companies to review a patient's medical records and/or ask questions about past health conditions -- a process called "medical underwriting" -- before issuing individual policy coverage.

"Retroactively cancelling patients is illegal as a matter of law if insurance companies fail to review an applicant's insurability before issuing coverage," said Flanagan. "All illegally cancelled patients must be swiftly reinstated in full, without dragging the process through months or years more of review. That will at least make the insurance companies follow the law on future policy applications."

Read Consumer Watchdog's letter on Monday citing the DMHC's legal authority and duty to require immediate reinstatement of coverage: http://www.ConsumerWatchdog.org/resources/ReinstatementLetterDMHC.pdf.

Visit us on the web at http://www.ConsumerWatchdog.org.

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SOURCE Consumer Watchdog Copyright©2008 PR Newswire. All rights reserved

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