The proposed house law prohibits arbitration clauses in health insurance contracts

A invoice introduced Thursday by House Democrats banned forced arbitration clauses in health insurance contracts that prevent clients from proceeding with denied claims.

These clauses require that patients go to a private arbitrator to resolve disputes with their insurance companies, but Democrats argue that the practice is unfair.

“Right now, health insurance giants are using mandatory arbitration to evade liability when they deceive patients and refuse to cover the care the law requires,” said in a statement Rep. Katie Porter (D- Calif.), Sponsor of the bill.

The bill, which has four Democratic co-sponsors, prohibits the inclusion of mandatory pre-emptive arbitration clauses and clauses limiting class action lawsuits in health insurance contracts.

Porter cited a report by Public Citizen, a consumer rights group, which claims an increasing use of binding, pre-dispute arbitration clauses.

The report argues that insurance companies use the clauses to “immunize” themselves from lawsuits for consumer fraud, treatment refusals in managed care and “unfair” claims settlement practices.

“This important legislation protects patients from being forced to sign their rights in the final print of a contract when they should have the right to seek legal aid if an insurer illegally denies coverage, refuses to provide the required notice and rights of claim. appeal, does not provide asked for premium reimbursements, or otherwise acts in bad faith, “said Representative Lloyd Doggett (D-Texas.), chairman of the subcommittee on health of the ways and home.

Arbitration is typically cheaper than litigation and can take less time. But opponents say forced arbitration gives companies an unfair advantage over consumers and workers.

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