Schwarzenegger vetoes rescission bill

Gov. Arnold Schwarzenegger vetoed a bill that would have required health plans to seek an okay from a third-party before revoking a customer’s health insurance.

The bill, AB 1945 by Assemblyman Hector De La Torre, D-South Gate, was sponsored by the California Medical Association. It had received substantial bipartisan support in the Assembly, but passed with just one Republican vote in the Senate.

De La Torre was clearly angry at the veto.

“Having the governor not engage in any discussions or negotiations for months, and then just veto the bill is astonishing,” he said. “The issue was good enough to use as an applause line in his State of the State Address in January, but not to sign a good piece of legislation that would protect insured people in the individual market.”

But the veto was hailed by health plans, which vigorously opposed the measure.

“We are pleased that Governor Schwarzenegger recognized that AB 1945 was a bill that missed its mark.  Rather than offer consumers real legal protections from unfair rescission or cancellation, it would have invited dishonesty on applications and lead to price increases and reduced coverage in the individual market," said Christopher Ohman, president of the California Association of Health Plans. 
“This bill would have undermined 100 years of contract law that allows contracts to be rescinded for failure to disclose a material face regardless of intent,"  he said. "Health plans support improved clarity in applications, ensuring consumers receive timely notice about questions of coverage and have the chance to work with the health plan, and health plans support using an independent third party to review rescission decisions and plans are willing to abide by those decisions.” 

In his veto message, Schwarzenegger cited a number of provisions he said should have been in the bill, including additional protections for patients and standardized health care applications.

“This bill was written by the attorneys that stand to benefit from its provisions. In rushing to protect a right to litigate, the proponents failed to consider the real consumer protections that are needed,” the governor wrote.

But De La Torre dismissed the governor's reasons, saying “I think that’s just cover.”  De La  Torre accused the governor of doing the bidding of health plans that opposed the measure, saying, “I don’t think he ever intended to reign in rescissions.”

Within hours of the governor’s veto on AB 1945, and a host of other health care measures, a Schwarzenegger coalition of health-care reform advocates who supported the governor's health-care proposal earlier this year, put forward a message echoing the govenror’s call for more comprehensive health care reform.

“A comprehensive solution to the healthcare crisis in California is needed to truly reach our collective goals: to reverse rising healthcare costs, solve the problem of the uninsured, and dramatically improve the quality of care for every resident of this state,” said Cassie Gilson, legislative advocate for the Coalition To Advance Healthcare Reform just after the veto was announced. “We urge the governor and the Legislature to act quickly in the next legislative session to come to agreement on a comprehensive plan that accomplishes these goals.

De La Torre said that was wishful thinking. “In the meantime are all these people being screwed,” said De La Torre. ”What are they supposed to do?”

When asked if the issue could be handled as part of a more comprehensive approach to health-care reform, De La Torre said, “the governor tried that and it ddn’t work. I’m sorry but I don’t think he’s going to be able to deliver on that in the next two years. In the meantime, let’s fix what’s yelling for a remedy in the system.”

De La Torre said Schwarzenegger was “turning into Gray Davis, thinking the Legislature is just here to implement his vision.”

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