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Calif. Passes Bill To Make it Harder for Insurers to Cancel Coverage

— The California Legislature has approved a bill that will make it tougher for health insurers to cancel a policy after a person becomes sick. Supporters say it addresses a practice that's all too common.

State regulators say major health insurers have terminated thousands of policies after members have filed claims. Companies maintain they have the right to cancel insurance if a person made a mistake on their application.

Los Angeles Assemblyman Hector De La Torre says his bill will clarify the situation. He says if someone honestly enters into an insurance contract, they ought to be covered.

"Unfortunately, the health insurers have shown through thousands of cases that they are not to be trusted," said De La Torre. "They cannot be judge and jury."

The measure said a policy can be canceled only if it's proved a person intentionally lied on their application.

Insurers say that's too high of a standard.

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