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Health Insurance Rules Aim to Restrict Rescissions in CA

Cheryl Clark, for HealthLeaders Media, August 6, 2010

California regulators will have a lot more power to both prohibit health insurance plan rescissions and control questions that plans may ask applicants when rules governing individual policies take effect Aug. 18.

"Keeping your health insurance can literally be a matter of life and death, and I have zero tolerance for insurers who use pretexts to illegally rescind policies," says Steve Poizoner, state Insurance Commissioner, who pushed for the new rules. "These tough regulations embody my commitment to enforce the law and to protect consumers who buy medically underwritten insurance coverage."

The change will, for the first time, allow a health plan applicant to indicate when he or she is unsure of or cannot remember the answer to a particular health history question. That rule also shifts more of the burden to insurers to not rely solely on an applicant's self-reported health history in making a decision about whether to sell the applicant a policy.

"To the extent that such response choices impede the insurer's ability to apply its medical underwriting guidelines, the insurer shall pursue alternative methods of obtaining such information, including, but not limited to telephone interviews, medical records or other sources of information," the regulations state.

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