Raising Women’s Voices

Health insurers restricted from dumping customers

Posted in Health Reform Policy Proposals, Insurance companies by raisingwomensvoices on August 5, 2008

Gov. Arnold Schwarzenegger on Tuesday signed a bill that bars health insurers from creating financial incentives for employees to dump customers from health plans after they become sick. The bill by South Bay Assemblyman Ted Lieu grew out of a lawsuit against Health Net, a major insurance carrier based in Woodland Hills. A judge found earlier this year that Health Net had created a bonus system that rewarded employees who rescinded health plans after claims were filed. Health Net was ordered to pay $9 million to Patsy Bates, a Gardena hairdresser whose plan was canceled while she was undergoing cancer treatment. Lieu’s bill, AB 1150, passed unanimously in the Assembly and the Senate. “Before, when Health Net did it, it just smelled bad and looked bad,” said Lieu, an El Segundo Democrat. “Now it would be a violation of state law.” After the allegations came to light, Health Net voluntarily changed its practices and turned all rescission procedures over to a third party.

read_more: http://www.dailybreeze.com/ci_9966170

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