Mutual of Omaha Sued for Denying Coverage to Those with HIV

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Insurance Company Refuses Equal Benefits to Its HIV-Positive Clients
January 21, 1998

(CHICAGO, January 21, 1998) -- Lambda Legal Defense and Education Fund and the AIDS Legal Council of Chicago filed a lawsuit today against Mutual of Omaha, charging that the company violates federal and state law and endangers lives by severely limiting HIV-related health care coverage.

"Mutual of Omaha caps HIV-related care at a fraction of the amount allowed for other illnesses or conditions. This discrimination severely limits access to standard, life-saving therapies and is illegal," said Lambda Staff Attorney Heather C. Sawyer. "Initial investigation also suggests that this practice might be widespread across the country."

"The caps are not medically or financially justified," said AIDS Legal Council Executive Director Ann Fisher. "Insurers should not pit one disease against another, yet companies often and unfairly single out those with HIV infection for discrimination."

Lambda and the Council are suing the major health insurer on behalf of two HIV-positive Chicago residents, John Doe and Richard Smith, who have chosen to remain anonymous. Smith's Mutual of Omaha policy caps his lifetime benefits for HIV-related conditions at $25,000, and Doe's policy caps such benefits at $100,000, in contrast to the $1 million dollars that Mutual of Omaha would provide them if they needed health care for other medical conditions.

Filed in the United States District Court for the Northern District of Illinois, located in Chicago, Doe v. Mutual of Omaha Insurance Company contends that such caps violate the Americans with Disabilities Act and the Illinois Insurance Code.

Medical experts recommend early use of certain HIV drug regimens. They warn that any interruption of these drugs may jeopardize their future effectiveness and lead to the emergence of new, drug-resistant strains of the virus. The caps on HIV-related care have affected Doe's and Smith's treatment decisions, forcing them to consider going without therapies which actually could prolong their lives, the lawsuit said.

"Dealing with HIV is tough enough," commented Smith, "but having my health and even my life put at risk because of Mutual of Omaha's unwillingness to provide fair coverage is outrageous."

Added Doe, "I pay the same kinds of premiums as Mutual of Omaha's other policyholders. It isn't fair that I should be treated differently simply because I have HIV."

"Ultimately, the actions of companies like Mutual only increase health care costs for the public," said Lambda AIDS Project Director Catherine Hanssens. "When people like John and Richard can not turn to their companies for the benefits for which they have paid, they have to turn to public medical assistance to stay alive, while private companies avoid their obligations," she said.

Attorney Stuart Graff, a partner at Schiff Hardin & Waite and a member of the AIDS Legal Council Board of Directors, will be working with the groups in litigating the challenge.

Lambda Legal Defense and Education Fund is a national organization committed to achieving full recognition of the civil rights of lesbians, gay men, and people with HIV/AIDS through impact litigation, education, and public policy work. Headquartered in New York and with offices in Atlanta, Chicago, and Los Angeles, Lambda has regional and national expertise in all aspects of sexual orientation and HIV-related law and policy.

The AIDS Legal Council of Chicago was founded in 1987 as a not-for-profit organization to promote and protect the legal rights of men, women, and children affected by HIV/AIDS in the Chicago area. The agency's seven-person staff operates offices in the Loop and at Cook County Hospital. A corps of more than 70 volunteer attorneys augments staff efforts to ensure the presence of a legal safety net for persons living with HIV/AIDS.

(Doe v. Mutual of Omaha Insurance Company)


Contact: Heather C. Sawyer, Lambda, 312-663-4413 ext. 22
Ann Fisher, AIDS Legal Council, 312-427-8990
Peg Byron, Lambda, 212-809-8585 x 230, 888-987-1984 pager


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Related Issues: HIV