LOS ANGELES – Gov. Arnold Schwarzenegger vetoed a bill yesterday that would have cracked down on health insurance companies that cancel policies of people who make expensive claims.
Schwarzenegger, in a memo to lawmakers, called the practice, known as rescission, “deplorable.” But he said he vetoed the bill because it lacked several consumer protections and was “written by the attorneys that stand to benefit from its provisions.”
The measure would have established an independent review process of each case and required that policies be rescinded only if insurers prove a consumer willfully misrepresented pre-existing conditions on a policy application.
Schwarzenegger said he wanted the bill to include six other protections, including a requirement that companies continue coverage for family members of someone whose policy has been dropped.
Assemblyman Hector De La Torre, D-South Gate, who sponsored the bill, said the governor's criticisms were ill-founded. He said the family protection provision was left off the bill because it was contained in a different bill that the governor approved, AB 2569.
The veto also drew criticism from health advocates and medical trade groups, who called the veto a flip-flop of the governor's position.
“The governor's veto betrays the promise he repeatedly made to Californians to protect them from insurance companies canceling their health insurance when they need it most,” said Dr. Richard Frankenstein, president of the California Medical Association, which represents more than 35,000 doctors.
In other action, Schwarzenegger signed into law a sprawl-busting bill designed to curb greenhouse gas emissions by encouraging more compact development near jobs.
Touted as a key step in the state's fight against global warming, the bill “creates a model that the rest of the country and world will use,” the governor said.
The bill will ease the regulatory process for home builders seeking to develop projects near transit and employment centers, and will use transportation funds as an incentive for local jurisdictions to encourage “smart growth” and thereby reduce the number of vehicle miles traveled.
“Once again, the governor brands California as the international leader in combating greenhouse gas emissions,” said state Sen. Darrell Steinberg, D-Sacramento, the bill's author. “SB 375 will be used as the national framework for fighting sprawl and transforming inevitable growth into smart growth.”
Under the measure, the state Air Resources Board will establish targets for reducing greenhouse gas emissions in metropolitan regions throughout the state. Local planning organizations, such as the San Diego Association of Governments, then will be responsible for helping cities and counties create the kind of land-use policies that will ultimately help reduce vehicle emissions.
Also yesterday, Schwarzenegger vetoed a bill that would have made the birthday of gay political icon Harvey Milk a statewide “day of significance.”
Staff writer Lori Weisberg contributed to this story.
