HIV Insurance Caps Violate Americans with Disabilities Act

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Mutual of Omaha to remove restrictions from insurance policies of two men with HIV
December 3, 1998

(CHICAGO, December 3, 1998) -- A federal judge ruled that drastic restrictions on Mutual of Omaha's coverage for HIV- and AIDS-related medical expenses are illegal under the Americans with Disabilities Act, Lambda Legal Defense and Education Fund and AIDS Legal Council of Chicago announced Thursday.

On December 2, Judge Suzanne B. Conlon of the United States District Court for the Northern District of Illinois entered a final judgment against the company in Doe v. Mutual of Omaha.

Lambda and AIDS Legal Council of Chicago (ALCC) brought the lawsuit on behalf of two policyholders, "John Doe" and "Richard Smith," Chicago residents who are HIV-positive. The insurance giant places a cap on HIV-related coverage that is a fraction of the total amount the company pays for other medical care associated with any other illness.

Lambda Staff Attorney Heather C. Sawyer said, "This is a tremendous victory. We've stopped Mutual from jeopardizing our clients' lives." She added, "Policyholders with HIV and AIDS should not be forced by discriminatory insurance companies to forego necessary, life- saving care. For example, to say that a cancer patient deserves $1 million in care, while an AIDS patient merits only $25,000, is simply cruel and illegal."

Mutual had put a lifetime ceiling for HIV-related benefits on Doe's health insurance policy at $100,000, and Smith's at $25,000. By contrast, Mutual extends coverage for other medical conditions to $1 million, and permits more coverage if the policyholder makes no new claims after two years.

These restrictions have forced Doe and Smith to consider going without state-of-the-art therapies that could prolong their lives. As a result of the judgment, Mutual will lift the caps for Doe and Smith.

ALCC Executive Director Ann Fisher said, "The exceedingly low limits Mutual places on HIV-related coverage singles out people with HIV and AIDS for different, less favorable coverage. This violates Title III of the Americans with Disabilities Act."

Expert testimony submitted by Doe and Smith proved that Mutual, when it first initiated the coverage restrictions, knew that the cost of treating HIV and AIDS was similar or less than the cost of treating other medical conditions, and that the coverage restrictions were unnecessary.

Plaintiffs' expert witnesses also established that Mutual's practice of limiting HIV-related care has no basis in sound actuarial principles, nor actual or reasonably anticipated experience, and is illegal under Illinois law. With the judgment, Mutual avoided a trial. While the company conceded the factual issues in this case and agreed to the final judgment, Mutual is still expected to appeal the overall legal issue of whether or not the Americans with Disabilities Act prohibits discrimination in health insurance coverage.

Should Doe and Smith prevail on appeal, however, under the terms of the judgment Mutual must remove HIV-related limits in all of its health insurance policies.

Lambda Cooperating Attorney Stuart Graff, a partner at the Chicago law firm Schiff Hardin & Waite and a member of the ALCC Board of Directors, assisted in the litigation.

Lambda Legal Defense and Education Fund is the nation's oldest and largest legal organization serving lesbians, gay men, and people with HIV and AIDS.

The ALCC 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.

(Doe v. Mutual of Omaha, No. 98 C 325)


Contact: Heather C. Sawyer 312-663-4413 ext. 22; Peg Byron 212-809-8585, 888-987-1984 pager; Ann Fisher 312-427-8990


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