Consumer Watchdog Praises Insurance Commissioner Poizner for Health Insurance 'Rescission' Rules, Pans Schwarzenegger Administration for Failure to Reg...( Without Parallel Rules in Dept. of Ma...),Health

Without Parallel Rules in Dept. of Managed Health Care, Insurers Can "Discriminate...On the Basis of Which Agency Regulates" the Policy.

LOS ANGELES, June 3 /PRNewswire-USNewswire/ -- At a press conference today in Los Angeles, Consumer Watchdog joined California Insurance Commissioner Steve Poizner to praise new rules proposed by the Department of Insurance to protect patients from health insurance cancellations when they get sick. The group called on Governor Schwarzenegger's Department of Managed Health Care (DMHC), which oversees a far larger share of the state's HMOs and health insurers, to move forward with similar rules now more than 18 months overdue.

Today's announcement by Poizner comes following several years of media attention to the issue of health policy contract "rescission," or retroactive cancellations of coverage after a patient becomes sick with an expensive-to-treat illness. Thousands of California families have been left uninsured through no fault of their own while in the course of medical care, often put in jeopardy of medical bankruptcy and forced to rely on limited public health programs.

The draft rules proposed today by the Department of Insurance bar a cancellation if the insurance company failed to investigate a patient's health history before issuing a policy and if the patient was unaware of the medical information being sought on the application or failed to appreciate its significance.

"The rules proposed by the Department of Insurance go a long way to protect innocent patients from losing their coverage when they are sick and need it most," said Jerry Flanagan of Consumer Watchdog. "The Schwarzenegger Administration must also follow through with its planned rules applying to HMOs and PPOs, which are separately overseen by the Department of Managed Health Care. Without such rules, health insurers will be able to discriminate against patients on the basis of
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