Health care coverage.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care, and makes a willful violation of its provisions a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law prohibits the cancellation or nonrenewal of individual or group health benefit plans by a health care service plan or a health insurer except in specified circumstances, including for nonpayment of premiums or for fraud or misrepresentation, as specified, and gives an enrollee of a health care service plan contract a right to appeal a cancellation or nonrenewal to the Director of the Department of Managed Health Care. Existing law prohibits a plan or insurer from engaging in postclaims underwriting, as defined, and from rescinding an individual contract or policy for any reason, or canceling the contract or policy due to misrepresentation, as specified, after 24 months following issuance of the contract or policy. This bill would make that 24-month limit apply to all health care service plan contracts and health insurance policies and would consolidate various cancellation and nonrenewal provisions with respect to health care service plans. The bill would also prohibit a plan or insurer from rescinding a health care service plan contract or health insurance policy, or limiting any of the provisions of the contract or policy, once an enrollee or insured is covered under the contract or policy unless the plan or insurer can demonstrate that the enrollee or insured has performed an act or practice constituting fraud or made an intentional misrepresentation of material fact as prohibited by the terms of the contract or policy. The bill would require a plan or insurer to send a notice to the enrollee or subscriber or policyholder or insured at least 30 days prior to the effective date of the rescission containing specified information. The bill would modify the cancellation and nonrenewal appeal rights that apply to health care service plans and would make those appeal rights apply to health insurers and rescissions, as specified. The bill would require that coverage under the plan or policy shall continue pending the appeal. The bill would make other related changes and authorize the Director of the Department of Managed Health Care and the Insurance Commissioner to issue guidance to health care service plans and health insurers on compliance, as specified. Existing law requires a plan or insurer to have written policies and procedures establishing the process by which the plan or insurer approves, modifies, denies, or delays requests for health care services based in whole or in part on medical necessity. Existing law requires that these decisions be made within 72 hours when the enrollee or insured faces an imminent and serious threat to his or her health, as specified. This bill would require that those decisions be made within 72 hours or, if shorter, the time period required under federal law. Because this bill would impose additional requirements on health care service plans, the willful violation of which would be a crime, it would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.