Vetoed by Governor Arnold Schwarzenegger

Vote Smart's Synopsis:

Vote to concur with Senate amendments and pass a bill that establishes new regulations on the health care coverage application process and the process through which a health insurance company can cancel or rescind coverage, including an extension of government oversight of these processes.

Highlights:

-Requires the Director of the Department of Managed Health Care and the Insurance Commissioner to jointly develop regulations to establish standard information and health history questions to be used by all health insurers for individual coverage application forms (Secs. 2 & 18). -Prohibits a health care service plan from rescinding or canceling an individual health care service plan contract unless all of the following apply (Sec. 5):

-There was a "material" misrepresentation or omission in the information submitted on the application that would have prevented the contract from being entered into; -The health care service plan demonstrates that the applicant "intentionally" misrepresented or omitted "material" information on the application for the purpose of misrepresenting his or her health history in order to obtain coverage; -The application form was approved by the Department of Managed Health Care; and -The health care service plan sent a copy of the completed application to the applicant with a copy of the health care service plan contract and the required written notice; or -The individual failed to pay the charge for the coverage.

-Includes full disclosure related to any information that led to the plan's determination that the enrollee intentionally misrepresented or omitted material information on the application form; -Provides the enrollee with information indicating that the plan's determination shall not become final until it is reviewed and approved by the Department of Managed Health Care's independent review process; and -Provides the enrollee with information regarding the Department's independent review process and the right of the enrollee to opt out of that process, which would allow the proposed decision to cancel or rescind the contract to become effective.

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that establishes new regulations on the health care coverage application process and the process through which a health insurance company can cancel or rescind coverage, including an extension of government oversight of these processes.

Highlights:

-Requires the Director of the Department of Managed Health Care and the Insurance Commissioner to jointly develop regulations to establish standard information and health history questions to be used by all health insurers for individual coverage application forms (Secs. 2 & 18). -Prohibits a health care service plan from rescinding or canceling an individual health care service plan contract unless all of the following apply (Sec. 5):

-There was a "material" misrepresentation or omission in the information submitted on the application that would have prevented the contract from being entered into; -The health care service plan demonstrates that the applicant "intentionally" misrepresented or omitted "material" information on the application for the purpose of misrepresenting his or her health history in order to obtain coverage; -The application form was approved by the Department of Managed Health Care; and -The health care service plan sent a copy of the completed application to the applicant with a copy of the health care service plan contract and the required written notice; or -The individual failed to pay the charge for the coverage.

-Includes full disclosure related to any information that led to the plan's determination that the enrollee intentionally misrepresented or omitted material information on the application form; -Provides the enrollee with information indicating that the plan's determination shall not become final until it is reviewed and approved by the Department of Managed Health Care's independent review process; and -Provides the enrollee with information regarding the Department's independent review process and the right of the enrollee to opt out of that process, which would allow the proposed decision to cancel or rescind the contract to become effective.

Full Bill Text