Calif. moves to stop health insurers from dropping clients

California state regulators Thursday set the stage for the reinstatement of thousands of Californians who may have been wrongfully dropped from health care plans over the past four years when Cindy Ehnes, director of the California Department of Managed Health Care, ordered immediate reinstatement of more than two dozen patients whose insurance coverage had been rescinded, often for minor mistakes on applications.

The health plans will be required to pay all medical claims of the patients involved. The department's action drew immediate, if cautious, praise from consumer groups who have been pushing state regulators to enforce existing laws that protect health plan enrollees.

Attorney General Jerry Brown said his office is investigating health plans and other insurers for wrongful rescissions and insurance claim denials,and Gov. Arnold Schwarzenegger also registered his objection to rescissions, saying it is "outrageous that innocent patients have to live in fear of losing their health care coverage. I look forward to working with my partners in the Legislature to ensure this egregious practice is stopped."

Two bills addressing rescissions are in play in Sacramento. And Schwarzenegger said his health care proposal offers a solution: a prohibition of denials based on age or pre-existing medical conditions.

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