Sacramento, CA- In a 31-4 vote the Senate approved Assemblymember Hector De La Torre’s (D- South Gate) AB 1324.  AB 1324 will prohibit the retroactive cancellation of health insurance policies and provide additional protections to consumers.

Assemblymember De La Torre introduced AB 1324 to counteract the Health Maintenance Organizations (HMOs) unscrupulous practices of dumping policyholders after authorizing medical treatment and refusing to pay the medical bills.  Regulators at the Department of Managed Health Care examined 90 randomly selected cases of policy cancellations and found violations in each one.

“At a time when the Legislature’s focus is on increasing coverage for California’s uninsured, these unscrupulous HMOs have focused on leaving sick people without the benefits the insurance approved for,” said Assemblymember De La Torre.  “There are scores of HMOs that are leaving patients without the coverage they’ve already paid for.”

De La Torre explained that many consumers, who have already made payments to HMOs, are dumped by the insurance company when the time comes for them to receive coverage.  AB 1324 will ensure that HMOs will no longer leave the sick stranded when they need medical attention the most.

Although, current California laws provide some protections to consumers, HMOs and insurers have aggressively sought to skirt the law by finding loopholes as a way to rescind or modify a person’s policy after authorizing service for treatment.  AB 1324 will reaffirm existing laws and ensure that health plans no longer have the incentive to cancel coverage and for treatment already authorized by the provider.

The bill was discussed on the Senate floor today, Sept.5th, 2007. The bill will go for concurrence to the Assembly floor and is expected to go for signature to the Governor.