New Restrictions for HMOs?

Share |
(Sacramento, CA)
Monday, April 7, 2008

The state Department of Managed Health Care reviewed 90 cases where HMOs cancelled patients’ policies when they got sick. The findings alarmed Democratic Assemblymember Hector De La Torre.

De La Torre: “In every single one, all ninety of them, the insurer acted inappropriately, the insurer should not have dumped the patient.”

That’s why De La Torre says he’s proposing more regulation of managed health care plans. He wants insurance companies to get state approval before they can cancel clients.

Chris Ohman is the president and CEO of the California Association of Health Plans. He worries these rules will have unintended consequences.

Ohman: “We don’t want to lengthen the time it takes for folks to get coverage. We also don’t want to increase the cost of the administrative expense.”

But, De La Torre says the cost will be low. He says less than one percent of the 2.5 million Californians with individual health insurance get cancelled. Last year a similar De La Torre bill was signed into law that fined insurers for wrongly cancelling patients. But, he says this bill would stop the cancellation from happening to begin with. De La Torre says patients are often dropped because of common prescription drugs they take for chronic illnesses or when they get a cancer diagnosis.