San Francisco, CA — A Bay Area man and his thirteen-year-old son urged California Insurance Commissioner Steve Poizner to protect innocent patients from retroactive policy cancellations when they get sick and need coverage the most.
Mark Robison and his son Tylor will testified at a public hearing convened today by the California Department of Insurance to discuss new proposed rules that would limit such policy cancellations.
Retroactive cancellations of health insurance coverage – a practice known as “rescission” – have left thousands of California families uninsured through no fault of their own while in the course of receiving medical care. Those left uninsured are often put in jeopardy of bankruptcy and forced to rely on limited public health programs. Insurers often cite innocent mistakes or omissions on applications for coverage as a basis for canceling patients with illnesses that are costly to treat.
Consumer Watchdog 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 nearly two years overdue.
Click here for information about the overdue Schwarzenegger rules.
“Commissioner Poizner’s new regulations 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; without them, health insurers will be able to discriminate against patients on the basis of which agency regulates their insurance company.”
Consumer Watchdog said the Department of Insurance rules are a good start but need clarification that insurance companies may not cancel, rescind, limit, or raise rates of a policy after a claim is filed if the patient did not know of, or did not understand, the health information that the insurance company alleges was omitted or misrepresented on the application for coverage. Consumer Watchdog said the rules should also bar rescission if innocent patients could not purchase or attain new coverage after they got sick or if insurers failed to review records of applicants whom they had previously covered.
Click here to download Consumer Watchdog’s recommended changes to the new rules.
“The commissioner’s regulations are welcomed news for millions of Californians at risk of having their coverage cancelled when they get sick and need coverage most by insurance companies that will stop at nothing to increase profits,” said William Shernoff of Shernoff, Bidart, Darras & Echeverria LLP, who represents the Robsion family and hundreds of other policyholders that have been unfairly cancelled after becoming sick.
The Robison family’s coverage was rescinded after Mark Robison’s son, Tylor, underwent a corrective surgery for a congenital defect. The condition had been previously diagnosed while the family was enrolled in an individual Blue Cross Life & Health policy. Following a brief break in coverage, the Robinsons re-enrolled in an individual Blue Cross policy and were later rescinded after Tylor sought treatment for the condition.
When Mark Robison re-enrolled in coverage he did not know Tylor’s condition needed to be disclosed on the application since the family doctor had previously told him that no medical attention was necessary. In addition, Mark believed Blue Cross already knew of the condition since it had been diagnosed by an in-network physician while the Robisons were enrolled in a Blue Cross policy. It was only after the Robisons re-enrolled in Blue Cross coverage that a physician decided that medical care was needed. Blue Cross cited the Robisons’ failure to disclose the condition on the re-enrollment application as the basis for the rescission.
The Department of Insurance regulates some Preferred Provider Organizations (PPOs) and traditional indemnity health insurance and, giving it jurisdiction over approximately 5 million people’s health insurance. The commissioner of the Department of Insurance is elected. The DMHC is responsible for regulating Health Maintenance Organizations (HMOs) and some PPOs, giving it jurisdiction over approximately 22 million Californians’ health insurance. The director of the DMHC is appointed by the governor.
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Consumer Watchdog is a non-profit and non-partisan consumer advocacy organization with offices in Washington, D.C. and Santa Monica, California. For more information, visit us on the web at: www.ConsumerWatchdog.org