According to the article, all of the major players are under some type of examination from the state..BD
California managed-care regulators are taking aim at what they consider an illegal industry practice: rescinding individual coverage, sometimes after members have become sick, based on inadvertent or insignificant omissions on enrollment applications.
Investigations of five of the seven plans that offer individual health policies in the state have led to large fines and regulators anticipate more penalties. In addition, recently proposed regulations could severely limit health insurers' ability to rescind policies.
Cindy Ehnes, director of the California Department of Managed Health Care, said in an interview that none of the five health plans her department has been investigating has had an adequately fair process for dropping members based on application-form discrepanices.
Ehnes considers rescission "the harshest penalty possible for a possibly innocent omission of information that may be unrelated to the claim because it leaves the patient, when they're at their sickest, uninsured and uninsurable."
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