Governor Vetoes Bill To Regulate Health Insurance Cancellations

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(Sacramento, CA)
Tuesday, September 30, 2008

During the State of the State address in January Governor Schwarzenegger talked about Todd a 51-year-old San Diego man who bought health insurance on the individual market and was then dropped when he got cancer.

“The insurance company then when back through all of his records, looking for a reason to cut him off. They pointed to a knee problem unrelated to cancer. One month after he got sick the company cancelled his insurance. Todd died eight months later. We are taking action so what happened to Todd will not happen to any other Californian.” 

The bill vetoed by Schwarzenegger would have required California insurance companies to get the state’s permission to retroactively “rescind” or cancel members’ policies.  In his veto message Schwarzenegger said the bill would have actually made it more difficult for people to buy coverage individually.

Chris Ohman heads the California Association of Health Plans. He says the governor got it right because the bill missed the mark.

“What it would’ve done, is force consumers to pay for costly and lengthy litigation processes and at the end of the day gone in the wrong direction.” 
The California Medical Association sponsored the bill. CMA spokesman Ned Wigglesworth says the governor has betrayed Californians.

“People with individual insurance policies are still at risk.  Even if you have a health care insurance policy you are still at risk from having your insurance company yank that policy, yank that coverage away from you, when you get your sickest.” 
Consumer advocacy groups say although the bill is dead, their fight isn’t over. One group wants to take the issue to the voters by collecting signatures for a ballot initiative that would end unfair health insurance cancellations.