Texas House Bill HB1748

Texas 2009 - 81st Regular

Caption

Relating to the cancellation of a health benefit plan on the basis of misrepresentation or a preexisting condition; providing penalties.

Impact

The bill significantly impacts existing insurance regulations by mandating health benefit plan issuers to provide clear notification of cancellation intents and the right to an independent review. Furthermore, it stipulates that cancellations cannot be based solely on misrepresentation unless the misrepresentation is material, affects the risk, and is made with the intent to deceive. This reform is expected to enhance consumer protection, ensuring that individuals have the right to challenge and appeal cancellation decisions effectively.

Summary

House Bill 1748 addresses the cancellation of health benefit plans specifically related to misrepresentation or preexisting conditions. The bill introduces stringent guidelines to prevent health benefit plan issuers from unjustly canceling policies based on these conditions. It establishes a new section under the Insurance Code, detailing what constitutes unfair methods of competition and deceptive acts in regard to cancellation practices. The bill aims to protect consumers from arbitrary cancellation of health insurance policies by enforcing a more rigorous review process, ensuring that cancellation decisions are fair and justified.

Contention

Notable points of contention surrounding HB 1748 stem from concerns about the balance between protecting consumers and allowing insurance companies the ability to manage their risks effectively. Supporters argue that the bill is essential to prevent abuses by health insurers that could leave individuals unjustly without coverage. Conversely, critics voice apprehension that the increased regulatory burden could lead to higher premiums and reduced insurance options for consumers. Additionally, there are discussions on how effectively the independent review process can function to manage disputes fairly and efficiently.