Retroactive cancelation bill yet to be signed

September 24, 2008 7:46:13 PM PDT
A consumer protection that looked like a shoe-in just a few months back is no longer considered a sure thing. California Governor Arnold Schwarzenegger had asked for a bill restricting retroactive health insurance cancellation. Now the governor has a bill on his desk, but will he sign it?

This issue was getting a lot of publicity earlier in the year, but now that the issue has been addressed in the Legislature, there is silence.

The governor was concerned enough to bring up this issue in his State of the State Address. He told the story of a San Diego man named Todd who was diagnosed with cancer five months after buying health insurance.

"The insurance company then went back through all his records looking for a reason to cut him off. They pointed to a knee problem unrelated to cancer," said Gov. Schwarzenegger. "Todd died eight months later. We are taking action so that what happened to Todd will not happen to any other Californians."

And the Legislature agreed and a bill passed through both houses and is now on the governor's desk. But will he sign it? There is doubt, and that has Mark Robison concerned, and he takes this very personally.

"Our son had a surgery that was approved by them and authorized and then they -- 18 months later after the procedure, they rescinded the coverage," said Robison.

Robison and others are lobbying the governor to sign the bill. The insurance industry is working the opposite side of the issue. It says unfair retroactive cancellation should be addressed, but this legislation goes too far.

"The fact is that sometimes folks don't fill out their application completely or accurately, and in that case, everybody else has to pay the cost," said Christopher Ohman who represents the industry and is president of the California Association of Health Plans. "We get the message. The industry needs to do a better job, and that's why we've been advocating for improvements in making the process better for consumers and easier to minimize the number of rescissions that happen in the first place."

"The insurance companies would very much like to keep things the status quo, because it's good business in insurance to be able to cancel people after they get sick," said Jerry Flanagan with ConsumerWatchdog.com.

Neither side knows what the governor plans to do, but he had better do it quickly. The deadline to sign bills is next Tuesday at midnight.


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