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June 13, 2008

California Gets Failing Grade on Consumer Health Protections

Key health reform bills got a boost today with the unveiling of a national report that compared California to other states in terms of consumer protections for individual California health insurance.

Key health consumer advocates stated that insurance companies can deny health coverage to people with pre-existing conditions, refuse to pay for services needed to treat common ailments, and yank policies and deny payments when a consumer faces a rash of medical bills, and California (and other states) have little authority to protect consumers from such abuses.

Health Access California has based our comments today on a study published by Families USA, the national organization for health care consumers. Titled “Failing Grades,” the study reviews whether key protections are provided to healthy consumers to prevent insurance company abuses in California, as well as each of the other 49 states and the District of Columbia.

Without the purchasing power of group coverage, a Californian getting insurance as an individual is simply at the mercy of the big insurers, with few consumer protections. This report shows that California needs to tame our wild, wild west of an individual insurance market, and place new oversight over the insurance companies. This report places a spotlight on key bills pending in the California legislature, to ensure that coverage has value, and is there when the consumer needs it.

Bill up for key committee votes in the next few weeks will spotlight the need for significant new consumer protections, especially in the individual insurance market where consumers have little purchasing power and are simply at the mercy of big insurance companies.


The findings in the Families USA report show that consumers in most states are unprotected from many of these abuses.

• Only five states prohibit all California health insurance companies from cherry-picking the healthiest consumers and excluding everyone else. California allows for denying people for “pre-existing conditions,” even minor ones.

• In 35 states and the District of Columbia, there are no limits on how much insurers can increase premiums based on an individual’s health status. An additional six states have limits that still allow dramatic variations in premiums. California allows unwarranted increases in premiums.

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Posted by healthinsurance at June 13, 2008 07:15 PM