The man in the photo is a politician who must like to live dangerously.
He’s Steve Poizner, the insurance commissioner for the state of California, and he recently proposed some regulations that will not likely win him many friends in the health insurance industry.
Poizner, a Republican elected to the insurance commissioner post in 2006, has accused insurance companies of taking advantage of ambiguities in the existing law to inappropriately rescind health insurance policies for individuals after they have filed claims for medical treatment.
In an attempt to prevent such actions, Poizner’s office has introduced regulations that would clarify rescission statutes, thereby preventing insurers from unfairly rescinding health policies.
Policy rescissions are one of the reasons that many people hate health insurers. Everyone has heard horror stories of families threatened by bankruptcy or being forced onto inadequate state Medicaid plans because an insurance company didn’t want to pay large claims.
Poizner says that he wants to “send a message” to insurers: do all your underwriting before you accept a policyholder and stop the practice of reviewing applications for incriminating data once the policyholder becomes sick.
“Consumers deserve to have their insurance companies hold up their end of the deal, paying out claims and not canceling coverage when it’s needed most,” Poizner said.
Rescissions are a major political issue in California. The state cracked down on the three largest individual health insurance companies - Health Net, Blue Cross and Blue Shield - for engaging in rescissions. The Department of Insurance established requirements within each settlement to ensure the companies would not illegally rescind policies in the future.
Poizner points out that his Department has secured offers of reinstated coverage for 4,000 customers whose policies the state alleges were illegally rescinded. The settlement provisions covered the 85 percent of the market represented by the three companies.
The new regulations will cover the remaining 15 percent of the market by preventing improper rescissions from happening in the first place, Poizner said.
They include: setting rigorous standards that insurers must meet before they issue a health insurance policy; requiring insurers to verify that applications are accurate and complete, and that insurers ask unambiguous health history questions that do not confuse applicants; and providing fair due process protections for consumers who are being investigated for possible rescission, including early notice, the opportunity to provide input to the insurers, and the chance to clarify their application.
These are tremendous steps. Patients should not have their health coverage stripped away when they are at their most vulnerable. And for every patient that loses coverage through a policy rescission, there’s at least one provider who sees an increase in their bad debt load.
While the regulations must pass through a public comment and finalization period, they will likely take effect at the end of 2009.
Poizner may not garner many campaign contributions from insurance companies as a result of these regulations, but he should garner some praise from the rest of the healthcare community.