IN THE STATES: California Eyes New Regulation of Individual Insurance Market

It's a far cry from the comprehensive health care overhaul California Governor Arnold Schwarzenegger envisioned just a few months ago, but the Republican governor and Democratic state lawmakers are negotiating three related bills that would regulate health insurers, specifically the meager policies sold in the individual market that can leave people with big gaps in coverage if they become sick, the Los Angeles Times reports.

About three million Californians buy their insurance in the individual market, which as currently structured often means they are getting scanter protection and bigger shares of their medical expenses than people who get their insurance through their employer. Schwarzenegger and the legislators are trying to negotiate legislation that would set minimum benefits (although not necessarily a standard benefit package), cap insurers' profits on these policies, and restrict insurers' ability to cancel policies retroactively, a practice known as rescissions, Times reporter Jordan Rau writes. The state recently banned health insurance companies from rewarding employees with bonuses for rescissions.

Last year's comprehensive reform effort had significant support from California insurers, in part because it would have created millions of new customers. But this time the industry is "uniformly resisting the current push to circumscribe some of its most lucrative products."