SACRAMENTO, CA – Assembly Bill 1324 by Assemblymember Hector De La Torre (D-South Gate) was signed into law today.  The bill ensures continuity of care and lessens the incentive for HMOs and insurers to engage in retroactive rescissions and cancellations. 

AB 1324, authored by Assembly Member Hector De La Torre and sponsored by the California Medical Association, strengthens the law’s current protections and makes clear that insurance companies cannot cancel health care policies and leave patients stranded when they need coverage the most.  Insurers would have to prove that applicants lied about preexisting conditions before canceling coverage under these circumstances.

“For years, many consumers, who have already made payments to HMOs, were 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,” said De La Torre.  

The fines imposed haven’t been effective in changing these practices either: $1 million is just the price of doing business for a company making billions in profits.

“Current law provides some protection to consumers, but it is not enough.  AB 1324 will prevent HMOs from skirting the law by finding loopholes as a way to cancel policies after authorizing treatment,” said CA Medical Association President Anmol S. Mahal, MD. “

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