California Lawmakers and Governor at Odds — Again Insurance Policyholders Seeking Benefits Caught in Stalemate

Just when the California Legislature shows some backbone and passes legislation to end the insurance industry practice of canceling some policyholders’ coverage after they get sick and incur medical expenses, the measure could reach a dead end in the governor’s office. Gov. Arnold Schwarzenegger has threatened not to sign any bills until the Legislature makes progress on the state’s water crisis issues, prison overcrowding or confirmation of the governor’s key appointees. See “Health Bill Heads to Governor,” Los Angeles Times.

Last year, the governor vetoed a similar bill, but that was before reporting, led by the LA Times, documented how widespread the practice, known as rescission, really is. The Department of Insurance, responding with outrage over the unethical practice, is proposing its own solution to the problem.

In any event, we think it is unsavory to use sick people as political bargaining chips. Our state needs lots of work and another stalemate in Sacramento won’t help consumers. The insurance industry is likely out celebrating once again.

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