California Assembly hearing to look at rescinded health insurance issue

Mar 10, 2010 — The Sacramento Bee

Bobby Caina Calvan

Mar. 10, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- Just a small fraction of the thousands of consumers whose health coverage was unfairly revoked by their insurers have benefited from state-brokered settlements with insurance companies, according to an Assembly report made public Tuesday.

Today, an Assembly watchdog committee is expected to question officials from the Department of Insurance and the Managed Health Care Department.

Both agencies have boasted of their record in going after insurance companies for so-called rescission practices.

But some elected officials say the state agencies have done a poor job in helping subscribers regain coverage or recoup expenses for medical care that should have been paid for by their insurance companies -- had their policies not been rescinded.

"There has been no follow-through," said Assemblyman Hector De La Torre, D-South Gate, who chairs the Assembly Committee on Accountability and Administrative Review, which is holding today's hearing.

"When you're a regulatory agency and you claim to have fixed the problem, and yet a year and a half later, pretty close to nothing has happened, it deserves scrutiny," he said.

According to a report prepared for today's hearing, about 6,000 Californians had their policies rescinded by the state's five largest health insurers between 2004 and 2008.

The Managed Health Care Department attempted to inform 3,366 affected subscribers of the settlements via letter, but only 177 of those letters resulted in new coverage and only 92 subscribers recovered out-of-pocket medical expenses, totaling $870,000.

Lynn Randolph, spokeswoman for the Managed Health Care Department, took issue with the criticism.

She said the low participation rate is not unusual.

Randolph said the agency should be lauded for its crackdown on rescission practices, which has reduced the number of cases from about 1,500 in 2005 to less than a dozen.

Randolph said her agency sent out letters, aired public service announcements and did what it could to get consumers to participate in the settlements.

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Call The Bee's Bobby Caina Calvan, (916) 321-1067.

Newstex ID: KRTB-0178-42743516