I wanted to follow up on Anthony’s post with some more details about what Gov. Schwarzenegger’s administration has laid out as his goals, this year, to tackle the rescission problem.
A quick recap: The state ordered the immediate reinstatement of health coverage for 26 enrollees who had their health policies retroactively cancelled in the past four years by Kaiser, Blue Cross or Blue Shield. Thousands more policies of consumers insured by the three named insurers, Health Net and Pacificare, could also be reinstated after review by an independent arbiter. These retroactive cancellations typically occured after a consumer started using lots of expensive health services — triggering a second and very, very close look at their application by insurers.
As the system is now, said Daniel Zingale, one of the governor’s health policy advisors, “If you use it, you lose it,” of health coverage. To change this, the governor is supporting the following guidelines and principles to protect consumers:
1) A clear application process, which could help prevent mistakes and omissions
2) If there is no evidence of “willful misrepresentation,” a policy cannot be rescinded
3) Plans must give adequate notice to consumers about the fact that they are investigating their applications. There would also be an established appeals process for consumers.
4) A prohibition on bonuses, quotas and other incentives for insurance company employees to rescind.
Of course, Zingale pointed out — and we wholeheartedly agree — this would all be moot had we passed ABx1 1. With health reform, we would have:
- Guaranteed issue: everyone receives coverage, regardless of pre-existing conditions,
- Guaranteed that everyone was paying into the system so insurers didn’t go nuts about NOT being able exclude the really sick and expensive people,
- And guaranteed affordable health coverage and/or subsidies to purchase health coverage for 4 million Californians.
In the absence of that, though, this is a great place to focus reforms that would begin to help consumers feel more secure about the coverage they have.