SACRAMENTO — The California Legislature passed a measure Tuesday that would curtail the ability of insurance companies to cancel coverage for patients diagnosed with serious illnesses.
The bill addresses a practice known as rescission, which was the subject of a series of articles in The Times exposing how several major healthcare companies, including Blue Cross and Health Net Inc., canceled medical coverage for sick policyholders.
The practice has since been the subject of probes by law enforcement agencies in California and sparked congressional hearings. Government officials say thousands of policyholders in California have had their coverage dropped.
"The insurance industry has made billions by unfairly canceling health policies, with little to no oversight before rescinding a patient's insurance coverage," said Assemblyman Hector De La Torre (D-South Gate), author of the measure, AB 2. He said the bill "protects consumers and will put an end to this shameful practice."
The proposal, pushed by the California Medical Assn. and other advocacy groups, would allow regulators to block the rescission of coverage unless they find that a patient intentionally lied to the company about preexisting conditions.
It also would clarify for consumers what information they must provide to insurance companies when they apply for coverage, and simplify the forms on which patients report the information. And it would require the companies to complete a check of a patient's health history before approving their coverage.
The measure, approved by both houses of the Legislature, will go to Gov. Arnold Schwarzenegger once the Assembly approves minor changes. But as lawmakers acted on the health insurance issue and dozens of other matters Tuesday, the governor vowed to stop signing bills until further notice.
He rebuked legislators for failing to make progress on the state's water needs and its prison overcrowding crisis, as well as for refusing to act on confirmation of several of his key appointments. His staff announced that he would not sign any bills absent progress on those issues.
"These issues have been debated for up to five years," said Rachel Cameron, a spokeswoman for the governor. "It's time for action."
The threat drew angry retorts from the Assembly floor.
"You're not the emperor or king," said Assemblyman Alberto Torrico (D-Newark). "Do not call us out, governor. . . . Do your job."
