20-02-2025
CA bill could make health insurers pay $1 million for denying care
A new bill in the California Senate could help residents fight back against denials by health insurance companies.
Sen. Scott Wiener (D-San Francisco) has introduced Senate Bill 363, the Health Insurance Accountability Act, which intends to provide 'critical transparency and accountability for health insurance companies for baseless denials of coverage for medically necessary care,' Wiener's office said in a news release.
'Accountability is critical when insurance companies wrongfully deny Californians health care coverage,' said Wiener. 'The facts are alarming. Over 70% of mental health denials that make it all the way through the appeals process are overturned. This suggests insurers are engaging in widespread violations of state law and wrongfully denying urgently needed healthcare, potentially in a widespread way. We must gain a clearer picture of what is happening with coverage decisions and hold health plans accountable for unwarranted denials.'
Not only would Wiener's bill require health insurance companies to 'submit a written explanation regarding claim denials and modifications and the reason for such action,' but they'd also face increasing penalties for excessive denials.
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Financial penalties, which will fund children's health care services, begin at $50,000 for the first violation, $400,000 for the second and $1 million for ensuing noncompliance.
Wiener's push comes after the high-profile killing of UnitedHealthcare CEO Brian Thompson, which was allegedly committed by Luigi Mangione and motivated by insurers' use of a 'deny, defend, depose' strategy to avoid covering some procedures and medications.
While Wiener made no mention of Mangione, who is believed to have suffered from a back condition that may have prompted his conflict with the health insurance industry, though the highlighted others who have also struggled with having their health conditions properly covered.
'Between my own care, and that of my daughter's care, who lives with Hidradenitis Suppurativa, we've received dozens if not hundreds of denials from our health insurance plan over the years,' a woman named Colleen Henderson said in the release. 'It's ridiculous that I pay for insurance, yet they're never there when we need them. I'm grateful Senator Wiener is standing up for patients like us by requiring insurers be held accountable for their actions.'
The bill is expected to be heard in its first committee in March, according to Wiener's office.
The California Association of Health Plans, which represents the industry, has not yet taken a position on the bill, a spokesperson said.
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