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Capping AIDS Benefits: Does Title III of the ADA Regulate the Content of Insurance Policies?

Published online by Cambridge University Press:  08 January 2021

Catherine Olender
Catherine Olender*
Affiliation:
Yale University, Boston University School of Law
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American Journal of Law & Medicine , Volume 28 , Issue 1 , 2002 , pp. 107 - 123
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Copyright © American Society of Law, Medicine and Ethics and Boston University 2002

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References

1 205 F.3d 179 (5th Cir. 2000).

2 Id. at 182.

3 Id.

4 Id. at 184 n.3.

5 Id. at 182.

6 Id.

7 Id.

8 Id.

9 Id.

10 Id.

11 Id.

12 Id.

13 Id.

14 Id. at 188.

15 Id. at 186.

16 Id. at 191.

17 See, e.g., Weyer v. Twentieth Century Fox Film Corp., 198 F.3d 1104, 1115 (9th Cir. 2000) (holding that Title III does not address disability policy terms); Doe v. Mutual of Omaha Ins. Co., 179 F.3d 557, 559-63 (7th Cir. 1999) (finding that an insurance policy with an AIDS cap does not violate Title III); Ford v. Schering Plough Corp., 145 F.3d 601, 613 (3d Cir. 1998) (holding that an insurance policy that limits coverage for mental disabilities does not violate Title III); Parker v. Metro. Life Ins. Co., 121 F.3d 1006, 1012 (6th Cir. 1997) (holding that Title III does not regulate the content of goods and services).

18 Nancy R. Mansfield, Evolving Limitations on Coverage for AIDS: Implications for Health Insurers and Employers Under the ADA and ERISA, 35 Tort & Ins. L.J. 117, 132 n.78 (1999).

19 Doe, 179 F.3d at 564-65.

20 Id.

21 McNeil v. Time Ins. Co., 205 F.3d 179, 182 (5th Cir. 2000).

22 Barry R. furrow et al., Health Law 781 (3d ed. 1997).

23 See Mary C. Joly, Doe and Smith v. Mutual of Omaha Insurance Company: The Possible Impact of Insurance Caps on HIV-Infected Individuals, 4 Depaul J. Health Care L. 193, 221 (2000) (arguing that ADA coverage of the terms of insurance policies would be true to the Act’s purpose).

24 Id.

25 Id.

26 Id. at 222.

27 Pallozzi v. Allstate Life Ins. Co., 198 F.3d 28, 31-35 (2d Cir. 1999).

28 Carparts Distrib. Ctr., Inc. v. Auto. Wholesaler’s Ass’n of New England, 37 F.3d 12, 20 (1st Cir. 1994).

29 528 U.S. 1106(2000).

30 Mansfield, supra note 18, at 135.

31 See Heather J. Blum, Annotation, The Propriety, Under ERISA (29 U.S.C.S. §§ 1001 et seq.) and the Americans With Disabilities Act (42 U.S. C.S. §§ 12101 et seq.), of Capping Health Insurance Coverage for HIV-Related Claims, 131 A.L.R. Fed. 191, 191 (1996).

32 Doe v. Mutual of Omaha Ins. Co., 179 F.3d 557, 565 (7th Cir. 1999).

33 Mansfield, supra note 18, at 118-19.

34 29 U.S.C. §§ 1001-1461 (1994).

35 29 U.S.C. §§ 1001-1461.

36 See, e.g., McGann v. H & H Music Co., 946 F.2d 401, 406 (5th Cir. 1991). See also Blum, supra note 31, at 191, 198.

37 McNeil v. Time Ins. Co., 205 F.3d 179, 191 (5th Cir. 2000).

38 Doe, 179 F.3d at 565.

39 McNeil, 205 F.3d at 182.

40 Pub. L. No. 101-336, 104 Stat. 327 (codified at 42 U.S.C. §§ 12101-12213).

41 37 F.3d 12, 19 (1st Cir. 1994).

42 See Dion A. Sullivan, ERISA, the ADA, and AIDS: Fixing Self-Insured Health Plans with Carparts, 7 MD. J. CONTEMP. LEGAL ISSUES 423, 446-47 (1996).

43 See, e.g., McNeil, 205 F.3d 179; Weyer v. Twentieth Century Fox Film Corp., 198 F.3d 1104 (9th Cir. 2000); Doe, 179 F.3d 557; Ford v. Schering-Plough Corp., 145 F.3d 601 (3d Cir. 1998); Parker v. Metro. Life Ins. Co., 121 F.3d 1006 (6th Cir. 1997).

44 Pallozzi v. Allstate Life Ins. Co., 198 F.3d 28,'31-35 (2d Cir. 1999).

45 528 U.S. 1106 (2000).

46 See Mansfield, supra note 18, at 129 (citing Winslow v. IDS Life Ins. Co., 29 F. Supp. 2d 557 (D. Minn. 1998); Attar v. Unum Life Ins. Co. of Am., No. CA 3-96-CV-367-R, 1998 WL 574885, at *3 (N.D. Tex. Aug. 31, 1998); Dunlap v. Ass'n of Bay Area Gov’ts, 996 F. Supp. 962 (N.D. Cal. 1998); Lewis v. Aetna Life Ins. Co., 982 F. Supp. 1158 (E.D. Va. 1997); Cloutier v. Prudential Ins. Co. of Am., 964 F. Supp. 299 (N.D. Cal. 1997); Kotev v. First Colony Life. Ins. Co., 927 F. Supp. 1316 (C.D. Cal 1996); Baker v. Hartford Life Ins. Co., No. 94 C 4416, 1995 WL 573430, at *3 (N.D. 111. Sept. 27, 1995)).

47 15 U.S.C. §§ 1011-1015 (1994).

48 198F.3d28(2dCir. 1999).

49 42 U.S.C. § 12182(a) (1994).

50 42 U.S.C. § 12181 (7)(F) (1994).

51 Pallozzi, 198 F.3d at 32.

52 Id.

53 42 U.S.C. § 12201(c) (1994).

54 Pallozzi, 198 F.3d at 32.

55 Id. at 33.

56 42 U.S.C. § 12201(c)(3) (1994).

57 Pallozzi, 198 F.3d at 32.

58 37 F.3d 12 (IstCir. 1994).

59 Carparts Distrib. Ctr., Inc. v. Auto. Wholesaler’s Ass’n of New England, 37 F.3d 12, 19 (1st Cir. 1994).

60 Id.

61 Id.

62 Id.

63 Doe v. Mutual of Omaha Ins. Co., 179 F.3d 557, 560 (7th Cir. 1999).

64 Id.

65 Id.

66 Id.

67 Edward Caspar, Comment, Doe v. Mutual of Omaha: Do Insurance Policy Caps on AIDS Treatments Violate the Americans With Disabilities Act?,15 Notre Dame L. Rev. 1539, 1547 (2000).

68 28 C.F.R. § 36.307 (2001):

Accessible or special goods.

  • (a) This part does not require a public accommodation to alter its inventory to include accessible or special goods that are designed for, or facilitate use by, individuals with disabilities.

  • (b) A public accommodation shall order accessible or special goods at the request of an individual with disabilities, if, in the normal course of its operation, it makes special orders on request for unstocked goods, and if the accessible or special goods can be obtained from a supplier from whom the public accommodation customarily does business.

  • (c) Examples of accessible or special goods include items such as Brailled versions of books, books on audio cassettes, closed-captioned video tapes, special sizes or lines of clothing, and special foods to meet particular dietary needs.

69 Caspar, supra note 67, at 1548-50.

70 Id.

71 Id. at 1549-50.

72 Id. at 1549.

73 Id.

74 Id. at 1550.

75 McNeil v. Time Ins. Co., 205 F.3d 179, 186 (5th Cir. 2000).

76 Id. at 186.

77 Id. at 186-87.

78 Id. atl87n.9.

79 Id. (construing 42 U.S.C. §§ 12182(b)(l)(A)(i)-(iii) (1994)):

  • (i) Denial of Participation - It shall be discriminatory to subject an individual or class of individuals on the basis of a disability or disabilities of such individual or class, directly, or through contractual, licensing, or other arrangements, to a denial of the opportunity of the individual or class to participate in or benefit from the goods, services, facilities, privileges, advantages, or accommodations of an entity.

  • (ii) Participation in Unequal Benefit - It shall be discriminatory to afford an individual or class of individuals, on the basis of a disability or disabilities of such individual or class, directly, or through contractual, licensing, or other arrangements with the opportunity to participate in or benefit from a good, service, facility, privilege, advantage, or accommodation that is not equal to that afforded to other individuals.

  • (iii) Separate Benefit - It shall be discriminatory to provide an individual or class of individuals, on the basis of a disability or disabilities of such individual or class, directly, or though contractual, licensing, or other arrangements with a good, service, facility, privilege, advantage, or accommodation that is different or separate from that provided to other individuals, unless such action is necessary to provide the individual or class of individuals with a good, service, facility, privilege, advantage, or accommodation, or other opportunity that is as effective as that provided to others.

80 Id. (construing 42 U.S.C. § 12182(b)(2)(A)(ii) (1994)):

(ii) a failure to make reasonable modifications in policies, practices, or procedures, when such modifications are necessary to afford such goods, services, facilities, privileges, advantages, or accommodations to individuals with disabilities, unless the entity can demonstrate that making such modifications would fundamentally alter the nature of such goods, services, facilities, privileges, advantages, or accommodations.

81 Id. (construing 42 U.S.C. § 12182(a)(2) (1994)):

(2) Injunctive Relief. - In the case of violations of sections 302(b)(2)(A)(iv) and section 303(a), injunctive relief shall include an order to alter facilities to make such facilities readily accessible to and usable by individuals with disabilities to the extent required by this title. Where appropriate, injunctive relief shall also include requiring the provision of an auxiliary aid or service, modification of a policy, or provision of alternative methods, to the extent required by this title.

82 42 U.S.C. 12182(b)(l)(A)(ii) (1994).

83 Caspar, supra note 67, at 1542 (citing Doe v. Mutual of Omaha Ins. Co., 179 F.3d 557, 560 (7th Cir. 1999)).

84 42 U.S.C. 12188(a)(2) (1994).

85 McNeil v. Time Ins. Co., 205 F.3d 179, 187 n.10 (5th Cir. 2000) (construing 42 U.S.C § 12201(c)(l)-(3) (1994)):

(f)Insurance. Titles I through IV of this Act shall not be construed to prohibit or restrict—

  1. an insurer, hospital or medical service company, health maintenance organization, or any agent, or entity that administers benefit plans, or similar organizations from underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with State law; or

  2. a person or organization covered by this Act from establishing, sponsoring, observing or administering the terms of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with State law; or

  3. a person or organization covered by this Act from establishing, sponsoring, observing or administering the terms of a bona fide benefit plan that is not subject to State laws that regulate insurance.

Paragraphs (I), (2), and (3) shall not be used as a subterfuge to evade the purposes of Title I and III.

86 Id.

87 Id.

88 Id. at 187.

89 Id. at 187n.10.

90 Doe v. Mutual of Omaha Ins. Co., 179 F.3d 557, 562 (7th Cir. 1999).

91 Id. (citing 28 C.F.R. pt. 36, app. B § 36.212 (2001)).

92 Id. (citing U.S. Dep’t Justice, Title III of The Americans With Disabilities Act: Technical Assistance Manual § III-3.11000, reprinted in Americans with Disabilities Act Manual (BNA) at 90:0917).

93 Winslow v. IDS Life Ins. Co., 29 F. Supp. 2d. (D. Minn. 1998) (2001); Kotev v. First Colony Life Ins. Co., 927 F. Supp 1316, 1322-23 (C.D. Cal. 1996).

94 Doe, 179 F.3d at 562.

95 Id. at 563.

96 See Carparts Distrib. Ctr., Inc. v. Auto. Wholesaler’s Ass’n of New England, 37 F.3d 12, 19 (1st Cir. 1994).

97 Id. at 23 (citing 42 U.S.C. § 12101(b)(4) (1994)).

98 Id. (citing 42 U.S.C. § 12101(b)(1) (1994)).

99 Id. at 19 (citing S. Rep. No. 116, at 58 (1989)).

100 id.

101 Id. at 20.

102 Id.

103 Id.

104 Id.

105 H.R. Rep. NO. 101-485, pt. 2, at 136-37 (1990), reprinted in 1990 U.S.C.C.A.N. 303, 41920; H.R. Rep. No. 101-485, pt. 3, at 71 (1990), reprinted in 1990 U.S.C.C.A.N. 494; S. Rep. No. 101116, at 85 (1989).

106 H.R. Rep. NO. 101-485, pt 2, at 137 (1990), reprinted in 1990 U.S.C.C.A.N. 303, 420; H.Rep. NO. 101-485, pt. 3, at 71 (1990), reprinted in 1990 U.S.C.C.A.N. 494; S. Rep. NO. 101-116, at 85(1989).

107 See, e.g., Wai v. Allstate Ins. Co., 75 F. Supp. 2d 1, 8-9 (D. D.C. 1999); Walker v. Carnival Cruise Lines, 63 F. Supp. 2d 1083, 1093 (N.D. Cal. 1999); Lewis v. Aetna Life Ins. Co., 982 F. Supp. 1158, 1165-66 (E.D. Va. 1997); Cloutier v. Prudential Ins. Co. of Am., 964 F. Supp. 299, 302 (N.D. Cal. 1997); Kotev v. First Colony Life Ins. Co., 927 F. Supp. 1316, 1322-23 (C.D. Cal. 1996).

108 Doe v. Mutual of Omaha Ins. Co., 179 F.3d 557, 562 (7th Cir. 1999).

109 Id.

110 Id.

111 15 U.S.C. § 1012(b) (1994).

112 See, e.g., Humana, Inc. v. Forsyth, 525 U.S. 299, 310 (1999).

113 517 U.S. 25 (1996).

114 Pallozzi v. Allstate Life Ins. Co., 198 F.3d 28, 34 (2d Cir. 1999).

115 id.

116 Id. at 34 (construing 42 U.S.C. §§ 12181(7)(F), 12201(c) (1994)).

117 Id.

118 Id. at 34-35.

119 Id. at 35.

120 Id.

121 Id.

122 Id. (quoting Barnett Bank v. Nelson, 517 U.S. 25, 39 (1996)).

123 Id.

124 Doe v. Mutual of Omaha Ins. Co., 179 F.3d 557, 564 (7th Cir. 1999) (“[T]hus limited to a simple prohibition of discrimination, [Title III] does not impair state regulation of insurance.”).

125 Id. at 561-64.

126 Joly, supra note 23, at 218.

127 Id. at 219 (citing 525 U.S. 299 (1999)).

128 Id.

129 Id.

130 Id.

131 Id. at 219-20.

132 Id. at 220.

133 Id.

134 Id. (citing 463 U.S. 1073, 1081 (1983)).

135 id. at 220-21.

136 Sullivan, supra note 42, at 424.

137 See Joly, supra note 23, at 221.

138 Id.

139 Nancy R. Mansfield et al., Insurance Caps on Aids-Related Healthcare Costs: Will the ADA Fill the Gap Created by ERISA?, 14 Ga. St. U. L. Rev. 601, 602 (1998) (citing Thomas Bartram, Note, Fear, Discrimination and Dying in the Workplace: AIDS and the Capping of Employees ‘ Health Insurance Benefits, 82 K.Y. L.J. 249, 251 (1993)).

140 Id. at 603.

141 Id. at 606.

142 See Joly, supra note 23, at 221.

143 Mansfield et al., supra note 139, at 631 (1998).

144 Doe v. Mutual of Omaha Ins. Co., 179 F.3d 557, 559 (7th Cir. 1999).

145 Pamela Washington-Carter, AIDS and Disability-Based Discrimination in Employer- Provided Health Insurance: The ADA Imposes Liability for Broken Promises, 20 S.U. L. Rev. 457, 473-74(1993).

146 Id. at 476.

147 Id. at 476-77.

148 Id. at 477.

149 Sullivan, supra note 42, at 445.

150 Id. at 446-49.

151 Mary Crossley, Becoming Visible: The ADA's Impact on Health Care For Persons With Disabilities, 52 ALA. L. Rev. 51, 88-89 (2000).

152 Id. at 89.

153 id.

154 Id. (discussing Pub. L. No. 106-170, 113 Stat. 1860 (1999), codified as amended in scattered sections of 42 U.S.C. that allows disabled Social Security Disability Insurance or Supplemental Security Income beneficiaries to retain Medicare or Medicaid coverage after obtaining employment).

155 Id.

156 Richard Sorian et al Kaiser Fam. Found., Policy Brief: Critical Policy Challenges in the Third Decade of the HIV/AIDS Epidemic 6 (2002), available at http://www.kff.org.

157 Id.

158 Id.

159 Jennifer Kates & Richard Sorian, Kaiser Fam. Found., Financing HIV/AIDS Care: A Quilt With Many Holes 4 (2000) (discussing HIV Cost and Services Utilization Study [hereinafter HCSUS], which is "the only nationally representative study of people with HIV/AIDS in care.”), available at http://www.kff.org.

160 Id. at 2.

161 Sorian et al., supra note 156.

162 Kates & Sorian, supra note 159, at 3 (referring to analysis of HCSUS data).

163 id. at 12.

164 AIDS Action, Medicaid Managed Care & HIV/AIDS: A Guide For Community-Based Organizations 32 (2001), available at http://www.aidsaction.org.

165 Cf Kates & SORIAN, supra note 159, at 14 (“More information is needed to understand how these financing systems interact and how they can better work together to increase program efficiency and enhance access to care for people with HIV.”).

166 AIDS Action, supra note 164, at 1. See also Kates & Sorian, supra note 159, at 1-2:

The current standard of care—combination therapy—calls for the use of expensive antiretrovirals in combinations of three, four, or even more medications. Combination therapy alone costs between $10,000 and $12,000 a year. When additional medical expenses for doctor’s visits, laboratory tests, and drugs to prevent or treat HIV-related opportunistic infections are taken into account, annual costs rise to approximately $20,000 per patient, with even higher expenses for those with more advanced HIV- related illness. … Even among those individuals who have resources, the costs of HIV can quickly exhaust their assets and may leave them impoverished. In addition, despite recent improvements in treatment, HIV/AIDS is often a disabling condition that forces individuals to leave the workforce (or to be unable to enter the workforce) thereby losing access to both income and, eventually, private insurance. Indeed, many people with HIV in care are low-income (an estimated 46% have incomes below $10,000 a year) and unemployed (63%). Because of these factors, people with HIV rely heavily on the public sector for care and public expenditures on HIV care have risen significantly.…[However,] the average cost of HIV-related care per person per year is less than the cost of treating many other disabling conditions (citations omitted).

167 Mary R. Anderlik & Wendy J. Wilkinson, The Americans with Disabilities Act and Managed Care, 37 Hous. L. Rev. 1163, 1246 (2000).

168 Bonnie Poitras Tucker, Access to Health Care for Individuals with Hearing Impairments, 37 Hous. L. Rev. 1101, 1162 (2000) (citing John W. Parry, The Supreme Court and the ADA: Sovereign Immunity Musical Chairs, 24 Mental & Physical Disability L. Rep. 186 (2000)).

169 Id. (citing Albertson’s, Inc. v. Kirkingburg, 527 U.S. 555, 565-66 (1999) (holding that the determination of whether an individual is disabled under the ADA must be made in light of the individual’s physical or mental ability to compensate for a physical impairment); Murphy v. United Parcel Serv., Inc., 527 U.S. 516, 523 (1999) (concluding that an individual is only “regarded as” being substantially limited in his or her ability to work if that individual is “regarded as” being precluded from more than a particular job); Sutton v. United Air Lines, Inc., 527 U.S. 471, 482 (1999) (holding that a determination of whether an individual has a disability within the meaning of the ADA must be made in light of mitigating measures that may ameliorate the effects of the disability)).

170 Id.