Texas Senate Bill SB207

Texas 2009 - 81st Regular

• Filed: 11/10/08
• Out of Senate Committee: 5/1/09
• Voted on by Senate: 5/5/09

Caption

Relating to prohibition of certain business practices related to rescission of coverage under health benefit plans.

Impact

By implementing such regulations, SB207 stands to significantly impact state laws regarding health insurance and consumer rights. The bill will amend the Texas Insurance Code by introducing provisions that restrict how health benefit plan issuers may compensate their employees and affiliates. The goal is to create a more equitable environment where the focus remains on providing necessary health coverage rather than on profitability derived from rescinding policies. Expecting compliance from health service providers, this bill also aims to enhance trust in the insurance market, potentially influencing other states to consider similar regulations.

Summary

Senate Bill 207 aims to address unethical compensation practices among health benefit plan issuers by prohibiting their ability to offer compensation based on the rescission, cancellation, or limitation of coverage. This legislation intends to protect insured individuals from potential abuse by insurance companies, which could incentivize them to rescind coverages unjustly for financial gain. Through this bill, the state seeks to enforce fairer practices in the handling of health benefit claims and ensure that consumers are safeguarded against potentially harmful business incentives that could imperil their access to medical care.

Contention

Opposition to SB207 may stem from concerns among insurance companies regarding the limitations on their operational flexibility and potential impacts on profitability. Critics might argue that this bill could impede an issuer's ability to manage risks effectively, particularly when dealing with high-cost beneficiaries. The debate surrounding this legislation may delve into broader discussions on the balance between protecting consumer interests and maintaining business viability within the state’s health insurance market.