Friday, July 18, 2008
California regulators have been cracking down on insurers that cancel health policies after a person files medical claims. Now, a California congressman says he's going to look into the issue. KPBS Reporter Kenny Goldberg has more.
People who buy their own health insurance are subject to cancellation if an insurer suspects someone lied on their application.
Congressman Henry Waxman says the practice deserves closer scrutiny, and he's launching a probe into the matter.
Jerry Flanagan is with the non-profit group Consumer Watchdog . He says cancellations are lucrative for insurers.
Jerry Flanagan: The company gets to collect a premium, raise those premiums every year, and then if the person gets sick, they can have their cake and eat it to. They can retroactively cancel the policy, and thereby get out of paying those big medical bills.
Insurers contend policy cancellations are rare.
Flanagan says at least 5,000 Californians have had their coverage terminated since 2002.
Kenny Goldberg, KPBS News.