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Texas Association of Health Underwriters

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Texas Association of Health Underwriters Takes a Stand Against HB 2750

TAHU says House Bill 2750 Imposes Restrictions on Health Insurance.

Austin, TX, May 15, 2009 --( The Texas Association of Health Underwriters (TAHU) released a statement Tuesday advising legislators of the possible negative effects of House Bill 2750 on the Texas insurance industry. The House Insurance Committee held a hearing on HB 2750 last week along with its companion Senate Bill 1257.

“The worst part about this legislation is the imposition of severe restrictions on health plans and insurance carriers when they rescind a policy because the applicant misrepresented the facts when he or she applied,” TAHU president Ron Buffum said, “For example, the bill states that the health plan must prove that the applicant had ‘intent to deceive’.”

During the review process the insurer must continue to pay claims while facts and ‘intent’ are being sorted out. Since 2003 there have been 26 complaints about health insurance policies being rescinded and of those 26, three were justified, according to information from the Texas Department of Insurance.

Buffum said there is a less expensive route already in place and in insurance policies to address the possibility that someone lied in his or her application. “Put the claims in the ‘pending’ file until the issue is decided and pay them later if the policy rescission is not justified,” Buffum said.

TAHU leaders said that SB 1257 would make it possible for a person with pre-existing symptoms who has not visited a physician recently to buy a plan and face no risk of having that plan rescinded.

“You wouldn’t expect to be able to buy a fire insurance policy after your house begins burning? That’s exactly what this will permit,” Buffum added.

Other possible problems with the legislation, according to Buffum include a new rate increase review process for employers providing health insurance and the jeopardizing of rates for small employer groups by pooling insurance policies together.

“The group health insurance market that small employers have available is vibrant and competitive, especially when compared to other states. Texas employers want and rightfully deserve good public policy that promotes competition and availability. Unfortunately, SB 1257 and HB 2750 do not accomplish those objectives,” Buffum said.

About the Texas Association of Health Underwriters
A state chapter of the National Association of Health Underwriters, TAHU is a professional organization of agents and insurance company representatives aiming “…to inform and protect the consumer by enhancing the professional growth of its members.” Since its founding in 1930, there are now over 200 state and local chapters of the NAHU servicing the insurance needs of millions of Americans. More information can be accessed at


Media Contact: Laura Day, Eisen Marketing Group
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Texas Association of Health Underwriters
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