Foundation Being Set for Some California Health Care Reform: Consumer Protections Pass Assembly Health Committee

[courtesy of California Progress Report]

* Insurers would face restrictions in cancelling coverage retroactively
* Patients would be better able to assess hospital cost and quality data
* Other bills on hospital community benefits and "boutique hospitals"

By Hanh Kim Quach
Health Care Policy Coordinator
Health Access California

The Assembly Health Committee on Tuesday approved a smattering of bills that would begin to set the foundation for health care reform, providing security to health consumers – both for their coverage and choice of provider.

Two of the bills deal with the insurer practice of retroactively canceling policies after patients become sick and need expensive treatments. These rescissions leave patients tens of thousands – if not hundreds of thousands in debt. Another bill would require medical providers to disclose cost and quality information in order to give purchasers more power in selecting the highest quality and most efficient care.

RESCISSIONS

AB1945 (De La Torre) would create an independent panel to review cases where an insurance company wishes to rescind a policy. The bill passed on a bipartisan 11-0 votes, with Republicans Alan Nakanishi and Bill Emmerson voting for the bill. In addition to an independent panel, and review by regulators for rescissions, AB1945 would establish a standardized application for consumers to fill out. De La Torre cited recent investigations by state regulators, which found violations in every single instance.“That’s not an accident,’’ he said. Insurers, he said, should not be permitted to “act as judge and jury whenever they want to rescind a policy.’’

SUPPORT: California Medical Association, Health Access, California Alliance for Retired Americans, AARP, Congress of California Seniors, CalPIRG, Consumers Union, California Teachers’ Association, California Academy of Family Physicians and Consumer Federation of California spoke in support of the bill.

INDUSTRY: Industry associations were not completely opposed to the bill, but were concerned about whether the application would give insurers enough information about a potential enrollees condition so that “they can do reasonable underwriting up front,’’ said Charles Bacchi, for the California Association of Health Plans. That means the industry wants to be able to deny for pre-existing conditions, and the questions need to elicit enough detail to do that. Others had concerns about the need for regulator approval of rescissions, and the authority given to the state to revoke the licenses of health plans. Blue Cross of California opposed the measure.

AB2549 (Hayashi) is a related measure would limit health plans ability to cancel coverage because of a fraudulent application to six months after the application is approved. The bill passed on a party line vote, with Republicans either abstaining or opposing. The industry opined that the six-month period was too short. Current industry practice allows a period of two years for insurers to rescind because an expensive claim may not occur within the first six months – usually the trigger to review an enrollees application.