Consumers looking for coverage under California health insurance should carefully consider California law before purchasing a policy. Although insurance companies set many of their own regulations, California law requires insurance companies to abide by a number of rules. From mandating that health insurance companies not cancel policies because of certain conditions or incidents to requiring that companies cover some lasting injury or disability conditions, California law greatly impacts what insurance policies may be offered.

One of the laws that most affects California health insurance Health Insurance Portability and Accountability Act (HIPAA), a law designed to help people who lose their jobs retain health coverage. Under the law, people who are eligible for HIPAA coverage must be extended certain benefits. For example, people can't be denied coverage for pre-existing conditions if they are covered under HIPAA. If a patient had a lasting injury that was being treated when she lost her job, then she can't be denied HIPAA coverage if she are otherwise eligible.

California allows insurance companies to use pre-existing information to deny coverage to people who are not covered under HIPAA. However, the law requires that denial for pre-existing conditions be based on conditions that were actually diagnosed and treated in the past, and no insurance company can legally use genetic information to deny an applicant coverage.

Other important laws that affect California health insurance are laws that require insurance companies to cover certain conditions and procedures. For example, laws in California require health insurance providers to cover maternity services for women as well as services needed to help people stop smoking. Some screenings for diseases, like cancer, must also be covered under law.

California law also limits the reasons for which insurance companies can cancel policies. The law does not allow insurance policies to cancel policies because a person gets sick or suffers a lasting injury. Similarly, more recent law has mandated that California insurance companies not cancel policies because of minor mistakes on applications. New laws require insurance companies to make questions clear and understandable. The laws mandate questionnaires to use simple sentence constructions, avoid confusing grammar and ask questions that an average person with no medical training would be able to understand and answer honestly.

As more and more federal legislation is being considered and passed with regard to health insurance, the legal effects on California law will be even more complex. However, most insurance laws are designed to make insurance companies more honest and insurance fair. Consumers will have to start learning about both state and federal law when they choose insurance packages. Individuals should learn about insurance laws to know their rights when they start to shop.