"By limiting product flexibility, we'd also be limiting the affordability and access to coverage," said Nicole Kasabian Evans, a spokeswoman for the California Assn. of Health Plans.
The average monthly premium for policies obtained individually in 2006 was $259, compared to $382 for policies bought by small businesses for their workers, according to the most recent survey by the California HealthCare Foundation, an Oakland nonprofit devoted to improving healthcare.
But a person with individual coverage paid an average of $1,825 in deductibles and co-payments, triple the $630 paid by someone insured through a small business, the survey found.
Three bills heading toward final legislative passage would restrict insurers' ability to cancel policies retroactively by alleging that customers had lied about their medical histories when applying for coverage. That practice has led California regulators to fine major health plans more than $15 million for not sufficiently scrutinizing applications or failing to prove that they were deceived.
Democrats want to limit cancellations to the first 18 months of coverage and require insurers to obtain approval from regulators before revoking a policy. Schwarzenegger wants to let insurers keep the recision option but impose new rules intended to thoroughly vet people's medical histories. The governor also would have independent arbitrators decide whether an insurer could cancel a policy.
Another measure aims to ban the most limited policies and make it easier for consumers to comparison shop in a market in which, said Marian Mulkey, a senior program officer at the California HealthCare Foundation, "it is quite difficult to understand all the provisions, limitations and features of policies."
This legislation would require individual healthcare policies to cover physician services, hospital care and preventive services, and would set a maximum amount patients would have to pay each year toward their bills. State regulators would sort policies into categories based on the benefits they offer and establish minimum benefits for each category. Presumably, that would allow consumers to compare what competing companies offer.
Schwarzenegger has asked Sen. Darrell Steinberg (D-Sacramento), author of the bill, SB 1522, to limit it to categorizing plans and not order insurers to offer specific benefits.
