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April 17, 2008

California Managed Care Dept Plans Rescissions Announcement

California Department of Managed Health Care Director Cindy Ehnes plans to make an announcement Thursday afternoon regarding reinstatement of health coverage for consumers whose policies were rescinded by various insurers.

The announcement involves consumers whose policies were dropped by WellPoint Inc.'s (WLP) Anthem Blue Cross, UnitedHealth Group Inc.'s (UNH) PacifiCare, Health Net Inc. (HNT) and the nonprofit Kaiser Foundation Health Plan and Blue Shield of California, said department spokeswoman Lynne Randolph.

Ehnes, whose department has investigated rescission practices at those plans since 2005, has scheduled a news conference for 1 p.m. PDT in Sacramento. California already has levied fines for rescissions against several health insurance plans that offer individual policies in the state. Last fall, the state fined Health Net $1 million for failing to disclose a link between employee bonuses and the cancellation of individual insurance policies.

The state's managed-care regulators aim to stop what they consider an illegal industry practice: rescinding individual health coverage, sometimes after members have become sick, based on inadvertent or insignificant omissions on enrollment applications.

Ehnes and California Insurance Commissioner Steve Poizner last year proposed joint regulations to protect consumers in the individual health-insurance market from illegal rescissions.

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Posted by healthinsurance at April 17, 2008 11:49 AM

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