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PacifiCare 'Rescission' Settlement Gives Lip Service to Patient Losses But Stacks Legal Deck in Favor of Insurers
Date:6/19/2008

"Reform" Legislation Given Green Light by Insurers

SANTA MONICA, Calif., June 19 /PRNewswire-USNewswire/ -- A settlement announced today by California health regulators acknowledged that patients should be able to recover unpaid medical bills following illegal cancellations of their health coverage. Yet the details of the settlement stack the legal deck in favor of health insurers, said Consumer Watchdog, allowing them in many cases to evade any payment.

Under the settlement, insurers could use closed-door arbitration proceedings, where patients would likely not be able to afford legal representation, to avoid paying the medical bills racked up by patients both before and after the policy rescission.

"Instead of weak regulatory capitulations to insurance companies we need criminal prosecutions of insurance executives whose companies boost profits by putting a patient's health at risk," said Jerry Flanagan, Health Care Policy Director for Consumer Watchdog. "Today's announcement gives lip-service to giving patients the ability to recover unpaid medical bills and other damages caused by illegal policy cancellations like the loss of a home, but foists an unfair burden on patients to prove that that care was necessary."

Consumer Watchdog said that health insurers and health plans are pushing regulators and the state legislature for "reforms" that favor them in legal proceedings.

"Regulators are saying the right words," said Flanagan, "but they're giving insurers the fine-print exceptions that they seek, and making it easier for the companies to evade their clear legal obligations to patients whose coverage was illegally canceled. In fact, under the settlement, as with those previously announced for Kaiser and Health Net, patients must act as their own attorneys in closed door arbitration proceedings where insurers can overwhelm them with a cadre of their lawyers."

Patients would have to interpret and even try to make complex legal arguments, said Consumer Watchdog. The patients would also be fighting the insurer about the necessity of their medical care in front of arbitration judges with financial ties to the health insurers, not before doctors or medical experts.

A bill before the state Legislature, AB 1945 by Assemblyman Hector De La Torre, would also allow private companies to decide if policy cancellations are warranted, even though such companies operate under financial incentives that favor health insurers. Yesterday, all health insurers and health plans removed their opposition to the bill following industry-friendly amendments and the Senate Health Committee approved the measure.

Consumer Watchdog has urged members of the Senate Judiciary Committee to oppose the measure when it is voted on next Tuesday.

http://www.ConsumerWatchdog.org


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SOURCE Consumer Watchdog
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