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State Makes It Tougher For Health Insurers To Cancel Policies

Audio

Aired 8/9/10

New rules designed to make it tougher for health insurers to cancel policies in California take effect next week. The regulations from the state's insurance commissioner support new federal laws.

— New rules designed to make it tougher for health insurers to cancel policies in California take effect next week. The regulations from the state's insurance commissioner support new federal laws.

Insurers have argued they have the right to terminate a policy if a person lied or made a mistake on their application.

California's new rules let applicants say they're not sure or they can't remember the answer to a health history question. Federal health reform allows insurers to cancel a policy only if there was intent to deceive.

Jamie Court directs the nonprofit group Consumer Watchdog.

"Having the double whammy of both the new federal rules and the state insurance commissioner's regulations, makes it very clear to insurance companies what they can and cannot do," said Court.

State officials say that over the past few years thousands of Californians have had their health coverage illegally terminated.

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