State Assembly: Californians Should Be Allowed To Use Their Own Healthcare

The Nunez health reform measure made it out of an Assembly Committee today, but I'm more interested in this other bill that Randy Bayne discusses:

HEALTH PLANS WOULD BE BANNED FROM RESCINDING POLICIES WHEN CONSUMERS USE COVERAGE

In a victory for consumers Tuesday, the Health Committee also passed AB1324 (De La Torre), which re-states and re-emphasizes California’s law prohibiting health insurers for canceling coverage consumers if they turn out to be sick.

The bill comes about after several high profile cases in which several insurers such as Blue Cross of California rescinded coverage – retroactively – from policyholders after expensive claims were made. Consumers were left with hundreds of thousands of dollars in bills after the insurer refused to pay the bills incurred during the time patients believed they were insured. Blue Cross alleges that the patients knowingly lied about their health status on their applications for coverage, triggering the cancellation.

The question I have is was would be the enforcement mechanism. Blue Cross has already been doing this in violation of the law, and yet the fine they received was a paltry $1 million dollars (I believe it was handed down by Assemblymember Dr. Evil, who thought it was a lot of money). the text of the bill does not address enforcement satisfactorily or really at all.

I wonder why nobody has restarted the "three strikes law for corporations" debate, and it seems like the Blue Cross case would be a perfect linchpin to do so. When you have a company that is so flagrantly breaking the law, the state should reserve the right to revoke its charter to do business. Of course the Chamber of Commerce and the bought-and-paid-for Republicans would fearmonger that businesses would fly out of the state, but essentially they're arguing that companies should have a right to break the law repeatedly. Somebody has to draw a line.