Insurance Discrimination on the Basis of Health Status: An Overview of Discrimination Practices,Federal Law,and Federal Reform Options

Schoen C. , “How Many Are Underinsured? Trends Among U.S. Adults, 2003 and 2007,” The Commonwealth Fund, June 10, 2008, available at <http://www.commonwealthfund.org/publications/publications_show.htm?doc_id=688615> (last visited June 22, 2009).

Himmelstein D. , “Illness and Injury as Contributors to Bankruptcy,” Health Affairs Web Exclusive,” W5-63-73 (2005), available at <http://content.healthaffairs.org/cgi/reprint/hlthaff.w5.63v1?maxtoshow=&HITS=10&hits=10&RESULTFORMAT=&author1=Elizabeth+Warren&andorexactfulltext=and&searchid=1&FIRSTINDEX=0&resourcetype=HWCIT> (last visited June 22, 2009).

Ayanian J. Z. , “Unmet Health Needs of Uninsured Adults in the U.S.,” JAMA, 284 no. 16 (2000): 2061–2069. The authors report that “adults whose self-reported health status was good, fair, or poor were 2 to 3 times more likely to have been uninsured for 1 year or longer than those who reported excellent or very good health,” at 2064.

America's Health Insurance Plans, “Health Plans Propose Guaranteed Coverage for Pre-Existing Conditions and Individual Coverage Mandate,” November 19, 2008, available at <http://www.ahip.org/content/pressrelease.aspx?docid=25068> (last visited June 22, 2009) (linking guaranteed coverage without preexisting condition exclusions to an individual coverage mandate.)

Although, as discussed in this paper, insurance discrimination can in fact constitute a civil rights law violation under certain circumstances.

Stone D. , “Protect the Sick: Health Insurance Reform in One Easy Lesson,” Journal of Law, Medicine & Ethics, 36 no. 4 (2008): 652–659.

Institute of Medicine, Crossing the Quality Chasim: A New Health System for the 21st Century (Washington, D.C.: National Academy Press, 2001): At 25.

29 U.S.C. § 1002(32) (2008).

Rosenbaum S. , “Health Policy Report: Medicaid,” New England Journal of Medicine, 346 no. 8 (2002): 635–640, at 635.

Id.

Perhaps the most vivid example is the state option to cover uninsured women suspected of having breast or cervical cancer. 42 U.S.C. §1396a(a)(10)(A)(ii)(XVIII) (2008) and 42 U.S.C. §1396a(aa) (2008).

42 U.S.C. §1396a(a)(55) (2008).

See Rosenbaum , supra note 9. But states can place reasonable limits on required benefits as long as normative needs are met. See, e.g., Alexander v. Choate, 469 U.S. 287 (1985) (permitting across the board limitations on inpatient hospital coverage even though such limitations reduce coverage below the level needed by persons with disabilities).

Clifford K. A. Inculano R. P. , “Commentary: AIDS and Insurance: The Rationale for AIDS-related Testing,” Harvard Law Review 100 (1987): 1806–1826, at 1808–1810.

Baker T. Simon J. , “Embracing Risk,” in Baker T. Simon J. , eds., Embracing Risk: The Changing Culture of Insurance and Responsibility (Chicago: University of Chicago Press, 2002): At 7.

Jost T. S. , Disentitlement: The Threats Facing our Public Health-Care Programs and a Rights-Based Response (New York: Oxford University Press, 2003): 265–281.

In 2008, 63% did so. Kaiser Family Foundation, Employer Health Benefits 2008 Annual Survey, 2008, at 34, available at <http://ehbs.kff.org/pdf/7790.pdf> (last visited June 22, 2009).

Id., at 47. Note 82% of eligible workers take up coverage when it is offered.

Monahan A. B. , “Health Insurance Risk Pooling and Social Solidarity: A Response to Professor David Hyman,” Social Science Research Network, 2008, at 1, available at <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1124947> (last visited June 22, 2009).

Kaiser Family Foundation, How Private Insurance Works: A Primer, April 2008, 1–28, at 11, available at <http://www.kff.org/insurance/upload/7766.pdf> (last visited June 22, 2009) [hereinafter How Private Insurance Works].

See Baker Simon , supra note 15, at 11–12.

See How Private Insurance Works, supra note 20, at 5.

Id., at 6.

Crossley M. , “Discrimination against the Unhealthy in Health Insurance,” Kansas Law Review 54 (2005): 73–153, at 85–87.

Stone D. , “How Market Ideology Drives Racial Inequality,” in Morone J. Jacobs L. , eds., Healthy, Wealthy, and Fair: Health Care and the Good Society (Oxford: Oxford University Press, 2005): 65–89, at 77.

Pear R. , “Women Buying Health Policies Pay a Penalty,” New York Times, October 29, 2008, at A23.

Rosenblatt R. , Law and the American Health Care System (New York: Foundation Press, 1997): 139–140.

See the wide range of cases discussed in Rosenblatt et al., supra note 28 (2001–2002 supplement). See also Rosenblatt , “Law and the American Health Care System” (2008 manuscript forthcoming).

McEvoy v. Group Health Co-op. of Eau Claire, 570 N.W.2d 397 (Wis. 1997).

McGann v. H. & H. Music Co., 946 F.2d 401 (5th Cir. 1991); Doe v. Mutual of Omaha, 179 F.3d 557 (7th Cir. 1999).

Bedrick v. Travelers Ins. Co., 93 F.3d 149 (4th Cir. 1996) (reversing in part plan denial of physical and speech therapy for child with cerebral palsy).

Aetna v. Davila, 542 U.S. 200 (2004). See also 42 U.S.C. § 1395w-102 (2008) (permitting Medicare beneficiaries to seek exceptions from prescription drug formulary limitations).

For a description of moral hazard in health insurance, see Jost T. S. , Health Care At Risk: A Critique of the Consumer-Driven Health Care Movement (Durham: Duke University Press, 2007): At xviii-xx.

For an excellent analysis of the relationship between health and society, see Robert Wood Johnson Foundation to the Commission to Build a Healthier America, Overcoming Obstacles to Health, February 2008, available at <http://www.commissiononhealth.org/PDF/ObstaclesToHealth-Report.pdf> (last visited June 22, 2009).

Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355 (2002) (upholding an Illinois statute requiring HMOs to provide independent review to determine medical necessity of covered services as an insurance regulation that bears directly on the spreading of risk between the insurer and insured).

Kentucky Ass'n of Health Plans, Inc. v. Miller, 538 U.S. 329 (2003) (upholding a Kentucky “any willing provider” law as an insurance regulation affecting the risk pooling arrangement between the insurer and insured).

McEvoy v. Group Health Co-op. of Eau Claire, 570 N.W.2d 397 (Wis. 1997); Krauss v. Oxford Health Plans, Inc., 517 F.3d 614 (2nd Cir. 2008) (upholding plan's decision to withhold full reimbursement for out-of-network care).

For a critique of the consumer driven health care movement and its implications for insurance, see Jost, supra note 33, at Ch. 3.

Bedrick v. Travelers Ins. Co., 93 F.3d 149, 153 (4th Cir. 1996), (upholding plan's denial of speech therapy for child with cerebral palsy because plan only covered services to “restore speech”).

Doe v. Mutual of Omaha, 179 F.3d 557, 563 (7th Cir. 1999) (upholding differential annual dollar treatment limits for HIV and related conditions).

Jones v. Kodak Medical Assistance Plan, 169 F.3d 1287 (10th Cir. 1999) (upholding health plan's denial of requested longterm alcoholism treatment as a result of embedded and exclusionary treatment guidelines that limited coverage to short term treatment).

Bedrick, 93 F.3d at 154.

Krauss v. Oxford Health Plans, Inc., 517 F.3d 614, 627 (2nd Cir. 2008) (upholding health plan's denial of full coverage and payment for out of network surgical and aftercare care related to breast cancer).

Id.

McGann v. H. & H. Music Co., 946 F.2d 401, 407–408 (5th Cir. 1991) (upholding HIV/AIDS treatment limits).

Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101 (1989) (applying lesser standard of review for challenges to plan denial of coverage if the plan gives the administrator or fiduciary discretionary authority to construe the terms of the plan); Metropolitan Life Ins. Co. v. Glenn, 128 S.Ct. 2343 (2008) (holding that courts should employ abuse of discretion standard of review only when there is conflict of interest arising from dual role of an entity as ERISA plan administrator and payer).

Rosenbaum S. , “Who Should Determine When Health Care is Medically Necessary?” New England Journal of Medicine, 340 no. 3 (1999): 229–232, at 231.

In this regard, regulations published by the Department of Labor in 2000 limit the discretion of plan administrators to design the appeals process in the case of appeals involving the denial of claims for health benefits. 29 C.F.R. § 2560.503–1(h) (2008).

Metropolitan Life Ins. Co. v. Glenn, 128 S.Ct. 2343, 2347 (2008).

Kentucky Ass'n of Health Plans, Inc. v. Miller, 538 U.S. 329, 341–342 (2003) (saving Kentucky “any willing provider” statute from preemption as a state law regulating insurance because of its application to the insurance industry and its risk spreading effects).

See Stone , supra note 25, at 80.

Rosenbaum S. , An Assessment of Legal Issues Raised in High Performing Health Plan Quality and Tiering Arrangements, George Washington University Department of Health Policy, 2007, available at <http://www.gwumc.edu/sphhs/departments/healthpolicy/chsrp/downloads/Physician_tiering_arrangements_100207.pdf> (last visited June 22, 2009).

See Crossley , supra note 24, at 86.

Id., at 86–87.

42 U.S.C. §2000e-2 (2008).

Id.

See Crossley , supra note 24, at 86–87.

Rosenbaum S. Teitelbaum J. , “Civil Rights Enforcement in the Modern Healthcare System: Reinvigorating the Role of the Federal Government in the Aftermath of Alexander v. Sandoval,” Yale Journal of Health Policy, Law and Ethics 3 (2003): 215–252, at 217.

In Linton v. Carney, 779 F. Supp. 925, 932 (M.D. Tenn. 1990), perhaps the clearest case decided on the issue, Medicaid plan administration payment practices that resulted in racially segregated nursing home facilities were struck down as violating Title VI. For a general discussion of Title VI in a health care context see id. (Rosenbaum and Teitelbaum).

See Crossley , supra note 24, at 87.

Id. See also Stone, supra note 25, at 81.

See Pear , supra note 26.

Id. See also Crossley, supra note 24, at 887–89.

Id., at 90.

Id.

See Crossley , supra note 24, at 88–889.

Id., at 96.

Id., at 95.

Id., at 97–98.

42 U.S.C. § 12112 (2008).

42 U.S.C. § 12132 (2008).

42 U.S.C. § 12182 (2008).

29 U.S.C. § 794 (2008).

42 U.S.C. § 12111(8) (2008).

29 U.S.C. § 705(20) (2008).

Bradgon v Abbott, 524 U.S. 624, 630–631 (1998).

See, e.g., Gonzales v. Garner Food Services Inc., 89 F. 3d 1523 (11th Cir., 1996); reh. en. banc den. (1996); cert. den. sub. nom. 520 U. S. 1229 (1997).

Olmstead v. L.C., 527 U.S. 581, 589–590 (1999).

Pollitz K. Sorian R. , “Ensuring Health Security: Is the Individual Market Ready for Prime Time?” Health Affairs Web Exclusive (October 23, 2002): 372–376, at 372–373, available at <http://content.healthaffairs.org/cgi/content/full/hlthaff.w2.372v1/dC1> (last visited June 22, 2009).

See discussion of the ADA insurance safe harbor in Doe v. Mutual of Omaha, 179 F.3d 557 (7th Cir. 1999).

Alexander v Choate, 469 U.S. 287, 302–303 (1985) (upholding Tennessee's 14-day limitation on annual in-patient hospital days covered by Medicaid); Rodriguez v. City of New York, 197 F.3d 611 (2nd Cir.1999) (upholding a distinction between physical and mental disability in the New York Medicaid program's payment for in-home “cueing” services).

Doe, 179 F.3d at 563 (upholding caps in medical insurance policy benefits for AIDS). See also Gonzalez, 89 F.3d 1523 (involving AIDS treatment exclusions in a Title I context).

Id.

Cowart G. , “HIPAA Nondiscrimination and Portability Updated and Expanded,” American Law Institute – American Bar Association Continuing Legal Education 91 (2007): 97.

Id., at 100.

Id.

Id.

Id., at 100–101.

Id., at 101–102.

Id.

Id., at 103.

Id., at 99.

Id.

Rescission of Individual Health Insurance Policies before the House Committee on Oversight and Government Reform, at 3–4 (July 17, 2008) (statement of A. Block, Director, Center for Drug and Health Plan Choice, Centers for Medicare and Medicaid Services), available at <http://oversight.house.gov/documents/20080717111126.pdf> (last visited June 22, 2009).

See Cowart , supra note 84, at 99–100.

Id.

Id.

An indication of the virtual absence of federal oversight can be found in guidance issued by the Centers for Medicare and Medicaid Services, which is charged with enforcement of the non-discrimination provisions in the state-regulated market. Guidelines at the CMS Web site provide an extraordinarily abbreviated, incomplete, and cryptic explanation of the non-discrimination provisions, the absence of any detailed information about state obligations, and the absence of any guidance regarding procedures for filing a complaint. In other words, not only is there no regulatory oversight, a clear pathway for individual enforcement (assuming that any consumer ever would recognize a discrimination problem) is completely lacking. Centers for Medicare & Medicaid Services, Health and Human Services, “Health Insurance Reform for Consumers,” available at <http://www.cms.hhs.gov/HealthInsReformfor-Consume/> (last visited June 22, 2009).

See Cowart , supra note 84, at 105.

Mulveon M. Davenport K. , and Whelan E. M. , “High Risk Insurance Pools: A Flawed Model for Reform,” Center for American Progress, available at <http://www.american-progress.org/issues/2008/09/flawed_model.html> (last June 22, 2009).

Hailey v. California Physicians' Service, 158 Cal. App. 4th 452 (2007); see also Business Practices in the Individual Health Insurance Market: Termination of Coverage before the H. Committee on Oversight and Government Reform, 11th Cong. (2008), available at <http://oversight.house.gov/story.asp?ID=2089> (last visited December 11, 2008).

See Cowart , supra note 84, at 130.

Id., at 126–133.

Id.

Id., at 126.

Id.

Id., at 115.

Id., at 115–119.

Id. at 116.

Id., at 121.

29 C.F.R. § 2590.702(g) (2008).

Id.

For a discussion of HIPAA non-discrimination and wellness programs, see Mello M. , “Wellness Programs and Lifestyle Discrimination – The Legal Limits” New England Journal of Medicine, 359 no. 2 (July 10, 2008): 192–199 (July 10, 2008).

29 U.S.C. § 1182(b) (2008).

Id.; 42 U.S.C. § 300gg-1(b) (2008).

29 U.S.C. § 1182(d) (2008); 42 U.S.C. § 300gg-1(d)(1) (2008).

For a thoughtful review of GINA's limitations, see Rothstein M. A. , “Is GINA Worth the Wait?” Journal of Law, Medicine & Ethics, 36 no. 1 (2008): 174–177.

Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, Pub. L. 110–343 (2008) (amending 26 U.S.C. § 9812, 29 U.S.C. § 1185a, and 42 U.S.C. § 300gg-5).

29 U.S.C. § 1185a(3)(B)(ii) (2008).

29 U.S.C. § 1185a(3)(B)(i) (2008).

29 U.S.C. § 1185a(3)(B)(iii) (2008).

29 U.S.C. § 1185a(5) (2008).

29 U.S.C. § 1185a(4) (2008).

29 U.S.C. § 1185a(b)(2) (2008).

See, e.g., the expression of coverage of physical therapy in Bedrick v. Travelers Ins. Co., 93 F.3d 149 (4th Cir. 1996), which expressed physical therapy as a broad coverage class and delegated authority to the insurer to make specific medical necessity decisions.

Id.

See, e.g., McGann v. H. & H. Music Co., 946 F.2d 401 (5th Cir. 1991), which involved the failed effort to challenge an HIV/AIDS treatment cap. The challenge was rejected as an impermissible claim, since the cap existed as a “macro” limitation on coverage, that is, part of plan benefit design.

Jones v. Kodak Medical Assistance Plan, 169 F.3d 1287, 1292 (10th Cir. 1999) (upholding ERISA plan administrator's denial of coverage for inpatient alcohol abuse treatment because decision was based on the contractual coverage specifications and an appeal was thus barred).

See Cowart , supra note 84, at 173–175.

Id.

Id. See Cowart, supra note 84, at 185–186.

Id.

29 C.F.R. § 2560.503–1(h) (2008).

See Mello , supra note 113.

Doe v. Mutual of Omaha, 179 F.3d 557 (7th Cir. 1999).

See America's Health Insurance Plans, supra note 4.

29 U.S.C. §1181(c), related to HIPAA portability, offers the basic definition of creditable coverage, which signals a form of health care financing recognized as “coverage” for purposes of federal health benefit laws.

See American Medical Sec., Inc. v. Bartlett, 111 F.3d 358 (4th Cir., 1997) for a discussion of federal preemption under ERISA of state efforts to regulate self insured plans by regulating the reinsurance market.

42 U.S.C. §1397cc(a)

42 U.S.C. §423.578. For a discussion of the Part D exceptions process, see V. Gottlich, The Exceptions and Appeals Process: Issues and Concerns in Obtaining Coverage under the Medicare Part D Prescription Drug Benefit, Kaiser Family Foundation, available at <http://www.kff.org/medicare/upload/The-Exceptions-and-Appeals-Process-Issues-and-Concerns-in-Obtaining-Coverage-under-the-Medicare-Part-D-Prescription-Drug-Benefit-Issue-Brief.pdf> (last visited June 23, 2009): at 4–6. In 2007, reversal rates for exceptions requests for non-formulary drugs ran at 48% according to the Centers for Medicare and Medicaid Services, which administers the part D program; see Fact Sheet, Part D Reconsideration Appeals Data 2007, available at <http://www.cms.hhs.gov/MedPrescriptDrugApplGriev/Downloads/DReconAppeals-Data2007.pdf> (last visited June 23, 2009).

Metropolitan Life Insurance Co. v Glenn, 128 S. Ct. 2343 (2008).

See e.g., Bipartisan Patient Protection Act, S. 872, 107th Cong. §1(a)103–104.

See Cunningham P. , “Mounting Pressures: Physicians Serving Medicaid Patients and the Uninsured, 1997–2001,” Center for Studying Health System Change, available at <http://www.hschange.com/CONTENT/505/?words=medicaid+provider+participation> (last visited December 14, 2008). A docket of Medicaid cases to improve provider participation underscores the urgency of the problem. National Health Law Program, “Docket of Medicaid Cases to Improve Provider Participation,” 2003, available at <http://www.nls.org/conf2003/provider-docket.htm> (last visited June 23, 2009).

42 U.S.C. §1396a(a)(30). For a review of the Medicaid “equal access” provision as it is known, see Rosenbaum S. , Understanding Medicaid's ‘Equal Access’ Law in the Context of Private Enforcement Actions, California Health Care Foundation, 2008.

Rosenbaum S. Markus A. Scheer J. , and Harty M. E. , Negotiating the New Health System at Ten: Medicaid Managed Care and the Use of Disease Management Purchasing, Center for Health Care Strategies, 2007, available at <http://www.chcs.org/publications3960/publications_show.htm?doc_id=684299> (last visited June 23, 2009).

See Rosenbaum , supra note 9, at 635.

See, e.g., 42 U.S.C. §1396n, authorizing the provision of home and community based waiver services for certain individuals whose health conditions require an institutional level of care.

See, e.g., Medicaid's optional coverage of individuals with disabilities who have excess earnings and are ineligible for Supplemental Security Income. 42 U.S.C. §1396a(a)(10)(A) (ii)(XV) (2008).