Mutual of Omaha Insurance to Lift Discriminatory Caps on AIDS Coverage
(CHICAGO, April 12, 2000) -- After fighting all the way to the United States Supreme Court, Mutual of Omaha Insurance has announced plans to end its unjustified discrimination against policyholders with HIV by lifting special restrictions on medical coverage for HIV or AIDS-related care.
On Tuesday, Lambda Legal Defense and Education Fund and AIDS Legal Council of Chicago (ALCC) welcomed the announcement with mixed relief, noting the decision is a vital breakthrough for all policyholders with HIV and AIDS who may now be able to afford potentially life-saving treatments and therapies that were out of reach due to Mutual's coverage limits.
However, the insurance giant's announcement came only after heated legal battles with the organizations on behalf of two Chicago policyholders whose coverage was limited to as little as $25,000, compared to the more than $1-million allowed most other health conditions.
"Mutual of Omaha has known for a long time that there is no legitimate, financial reason to treat its policyholders with AIDS differently than everybody else. But the company stood by what it knew was an unfair, unjustified policy, while policyholders like our plaintiffs feared that potentially life-saving treatments would be cut off," said Staff Attorney Heather Sawyer of Lambda's Midwest Regional Office in Chicago.
Sawyer defended a trial court victory striking down Mutual's AIDS caps under the Americans with Disabilities Act before the Seventh Circuit Court of Appeals in March 1999. In a 2-1 decision, a divided panel rejected the lower court's decision that discrimination in policy coverage is subject to the non-discrimination requirements of the Americans with Disabilities Act.
The U.S. Supreme Court declined to review the ruling in Doe v. Mutual of Omaha, but in a recent letter to policyholders, Mutual stated that claims "will no longer be subject to any provision specifically limiting benefits for AIDS or AIDS related conditions." The insurer said it would remove HIV- and AIDS-related coverage limits for all policyholders nationwide as of May 1.
Said ALCC Executive Director Ann Fisher, "This is good news for our plaintiffs and for all of Mutual's policyholders with HIV or AIDS. They now can get the kind of coverage they were paying for all along. It is disappointing that we did not achieve this victory under the ADA but we remain confident that other courts and state insurance commissions will recognize and end this type of discrimination."
Added Lambda AIDS Project Director Catherine Hanssens, "By putting an end to this arbitrary practice, Mutual finally has brought itself in line with the majority of the insurance industry."
The two Chicago men, identified as "John Doe" and "Richard Smith" in court papers, had challenged Mutual's capping of their lifetime HIV coverage at $100,000 and $25,000 respectively.
"Without the tireless work of Lambda and ALCC, Mutual would not have revisited this terrible policy," said Doe. "Lifting the caps will make all the difference for the healthcare and peace of mind of people like me."
Lambda is the nation's oldest and largest legal organization serving lesbians, gay men, and people with HIV and AIDS. AIDS Legal Council of Chicago is a not-for-profit organization that promotes and protects the legal rights of men, women, and children affected by HIV and AIDS in the Chicago area.
Contact: Heather Sawyer, 312-663-4413 x22; Peg Byron 212-809-8585 x230, 888-987-1984 pager; Ann Fisher 312-427-8990