HMO plans, held by 22 million Californians, won't be affected by the new rules but individual policies, now held by 2.6 million, will be. California has the largest individual health insurance market in the nation.
The regulations will set up specific steps insurers must take before they can rescind health policies. Insurers also must file revised health history questionnaires that comply with the new regulations, questionnaires that first must be approved by Poizner's office.
Anne Eowan, vice president of the Association of California Life and Health Insurers, (ACLHIC) says the industry is not happy with the regulations saying they are "unnecessary and will impose new costs and additional medical underwriting requirements on consumers."
"Federal health care reform, effective in a month, limits any rescission to instances of fraud or material intentional misrepresentation. Health insurers in the individual market have already instituted new standards and procedures that include understandable and clear application, accurate and complete underwriting, and independent, external reviews of any rescission decision," she adds.
With the changes, insurers will be prohibited from: