U.S. Supreme Court Declines to Hear HIV Insurance Caps Case

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Lambda, ALCC vow to continue fighting discriminatory insurance policies
January 10, 2000

(CHICAGO, January 10, 2000) — The United States Supreme Court Monday declined to review a case that seeks to clarify that the Americans with Disabilities Act prohibits insurance companies from imposing disease-specific caps that limit health coverage for policyholders with HIV or other disabilities.

Lambda Legal Defense and Education Fund and the AIDS Legal Council of Chicago said the practice, which has no basis in actuarial principles, violates the ADA and jeopardizes healthcare for many people with HIV and other illnesses.

Without comment, the justices refused to review Doe v. Mutual of Omaha, a case brought by two Chicago men whose lifetime HIV-related coverage to just a fraction of what their insurer allowed for most other medical conditions. The U.S. Court of Appeals for the 7th Circuit deadlocked 5-5 whether to reconsider a 2-1 panel ruling that upheld the insurance caps.

“We are disappointed that the Court will not provide much needed guidance to the lower courts on this life-and-death issue,” said Lambda Staff Attorney Heather C. Sawyer. She added, “The Court did not, however, give a green light to this practice. In declining review, the Justices merely indicated they are not ready to rule at this time.”

The two men, identified as “John Doe” and “Richard Smith” in court papers, sued the insurance giant, saying that the artificially low restrictions were illegal under the ADA, the landmark federal civil rights law prohibiting discrimination against people with HIV and other disabilities.

Mutual had put a lifetime ceiling of $100,000 and $25,000, respectively, for HIV-related care on Doe and Smith’s insurance policies, forcing the two men to consider foregoing state-of-the-art therapies that could prolong their lives. By contrast, Mutual extends coverage for heart disease, cancer, and most other serious illnesses up to $1 million and permits even more coverage if the policyholder makes no new claims after two years.

Lambda AIDS Project Director Catherine Hanssens said, “These coverage restrictions are not based on any actuarial principles. So why does this insurance company insist on defending such life-threatening policies? Because they think they can get away with it.” She added, “We will continue to work with the Equal Employment Opportunity Commission and the U.S. Department of Justice in fighting these discriminatory caps.”

In December 1998,U.S. District Judge Suzanne B. Conlon ruled against Mutual, which admitted that the caps were unnecessary because HIV- and AIDS-related care was not more expensive than care for other medical conditions. A divided 7th Circuit panel reversed that judgement in June, saying that the ADA does not prohibit companies from offering inferior services based on policyholders’ disabilities.

Lambda is the nation’s oldest and largest legal organization serving lesbians, gay men, and people with HIV and AIDS. 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. 98-4112) – 30 –

Contact: Peg Byron 212-809-8585 x 230, 888-987-1984 (pager)
Heather C. Sawyer 312-663-4413 x 22


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