Consumer Watchdog Calls on Governor & Regulator to Immediately Reinstate All Wrongfully Cancelled Patients, Move Forward on Delayed Rules

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Santa Monica, CA — In the wake of last week’s announcement by Governor Schwarzenegger and state regulators that health insurers would be required to reinstate 26 patients whose health policies were wrongfully cancelled, Consumer Watchdog sent a letter today urging that thousands of other cancelled patients not be required to submit to lengthy reviews before coverage is reinstated.  

Consumer Watchdog also renewed its call for long-over due rules to protect innocent patients from being left uninsured, uninsurable and in deep medical debt when insurance companies cancel policies after patients get sick.

Read the letter sent today.

In the letter, Consumer Watchdog wrote:

"We were very happy to hear your announcement last week that the Department will reinstate 26 patients whose coverage was wrongfully cancelled. To make those patients whole, their reinstatement must be retroactive to the time of the policy cancellation and health insurers must be liable for all health expenses from the date of issuing the contract through the date of reinstatement. We ask you to confirm that this is the case with the announced reinstatements.

"While providing restitution for those who have been wronged is a critically important duty of the Department, you also have a duty to protect Californians against future insurer malfeasance. In addition to answering the concerns below in writing, we call on you to confirm that the Department is moving forward with its long-awaited post-claims underwriting regulations.      

"We specifically have a number of concerns with your reported plan to subject the remaining thousands of rescinded patients to unnecessary and lengthy ‘third-party reviews’ before restoring their coverage….

"All patients should be reinstated immediately, because health plans failed to establish whether a patient willfully misrepresented a known, material health fact. Dragging patients through months of review before reinstatement is simply further unjust punishment.  If health plans want a third-party review of rescissions, the plans should be required to request the reviews only after patients have been reinstated."

The Department of Managed Health Care (DMHC) granted Consumer Watchdog’s petition for new rules to protect innocent patients from wrongful retroactive cancellations — so-called "rescissions" — in December 2007 but has yet to finalize them.  Read Consumer Watchdog’s 2006 petition calling for the new rules.
Read DMHC’s December 2007 response granting that petition.

The DMHC order the reinstatement of the 26 patients and reviews of thousands of other illegally rescissions in response to Consumer Watchdog’s letter giving regulators 10 day to do so.  Read the letter here.

Consumer Watchdog is a non-profit and non-partisan consumer advocacy organization.

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Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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