Business
Rescission legislation vetoed
■ California Gov. Arnold Schwarzenegger said the insurance bill didn't do enough to protect consumers. The California Medical Assn. said his veto leaves patients vulnerable.
By Emily Berry — Posted Oct. 26, 2009
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A bill that would have given patients the right to an independent review by the state before a health plan could rescind their coverage has failed to win the governor's signature. A similar bill met the same fate in 2008.
Gov. Arnold Schwarzenegger has said he opposes the practice of rescission. But this bill would have benefited trial attorneys, he said in his veto message Oct. 12.
"I remain comfortable sending this bill back for a second time without my signature because of the strong consumer protections the Dept. of Managed Health Care and Dept. of Insurance have successfully implemented over the past two years," the letter said.
California's major insurers have been fined millions of dollars by state regulators for improper rescissions. They have promised to take steps to stop the practice.
But for many, that's not sufficient assurance.
"With this veto, the governor told Californians that insurance company profits are more important than their access to health care when they get sick and treatment becomes costly," California Medical Assn. President Dev GnanaDev, MD, said in a statement.
Rescission also has been under scrutiny in Washington, D.C., where President Obama has spoken against the practice. In June, the House Energy and Commerce Subcommittee on Oversight and Investigations held hearings on the issue, with testimony from executives from UnitedHealthcare, WellPoint and Assurant Health. Asked whether they would commit to stop rescinding coverage absent evidence of fraud, all declined.
