States Push to Restrain Insurers
Legislators see rise in unfair cancellations of individual plans
By Matt Cantor,  Newser User
Posted Feb 21, 2008 5:10 PM CST
In the wake of increasing numbers of lawsuits made by those denied or retroactively billed for coverage, state-level lawmakers are acting to protect uses who pay for their own health insurance.   (Shutterstock.com)
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(Newser) – As more Americans buy individual health insurance, states are acting to make sure insurers don’t cancel the plans without fair cause, USA Today reports. Plans can be canceled if applicants misreport their medical history, whether accidentally or on purpose. But amid complaints that companies are cutting the plans unjustly, legislators across the country are working to impose stricter laws to protect consumers.

Cancellations are no small potatoes: they require consumers to pay for all past care, even if insurers had previously approved and covered it. But lawmakers in states including Connecticut, California, and New Mexico are pushing for more government surveillance of the practice. Insurers claim a few cuts are needed to keep other clients from footing the bill for fraud; but “there are abusive practices out there,” says an analyst.