Governor, you promised

We know a lot of California lawmakers are either partying in Denver or sulking about being stuck in Sacramento, but there is work to do. A bill requiring state review before insurance companies deny or rescind healthcare coverage to customers deserves to make it to the governor’s desk and to be signed into law.

Despite the whining of the insurance industry, AB 1945 by Assemblyman Hector De La Torre (D-South Gate) is neither draconian nor punitive. It provides protection for consumers who have found their policies revoked, often in the hour of their greatest need, but still permits companies to drop customers who intentionally submitted fraudulent applications.

Under the bill, companies that refused or retroactively rejected customers’ applications would have their decisions subject to review by the state Department of Managed Health Care or the Department of Insurance. It would establish industry norms for applications, requiring those departments to jointly establish standard health history questions. And most important, it would require companies to prove that a customer lied about a preexisting condition before rescinding coverage.

As Times reporter Lisa Girion has written in a series of stories about rescission, insurance companies have routinely dumped patients because of medical conditions that were diagnosed months or even years after they were approved for coverage. In the last four years, the Department of Managed Health Care has vigorously pursued companies that improperly rescinded coverage, fining them and demanding that insurance be restored. Blue Cross was fined $10 million for dumping 1,770 members, and its competitor, Blue Shield, $3 million for rescinding 450 members. Kaiser Permanente, Health Net and PacifiCare also were fined. But justice can come too late for people in a medical crisis.

Lest we forget, or lest he forget, Gov. Arnold Schwarzenegger promised in his State of the State address to halt this practice, and he invoked the story of Todd, a 51-year-old San Diego man who was diagnosed with lymphoma. “The insurance company then went back through all of his records looking for a reason to cut him off,” Schwarzenegger said. “They pointed to a knee problem, unrelated to cancer. ... One month after he got sick, the company canceled his insurance. Todd died eight months later. We are taking action so what happened to Todd will not happen to any other Californian.” If the Assembly and Senate vote correctly, the governor will be able to keep his promise.