¹ See Bann, Steven P. , Leading Blood Bank Organization Liable for Failure to Adopt AIDS Screening Test, N.J. L.J., June 10 , 1996, at 45Google Scholar (noting that by June 1982, homosexual males constituted 75% of AIDS patients); Unks, Gerald, Will Schools Risk Teaching About the Risk of AIDS? Special Section: Young Adolescents at Risk, 69 CLEARINGHOUSE REV. 205, 205 (1996)Google Scholar; Bonfield, Tim, ‘High-Risk’ Businesses Face Hunt for Insurance, CINCINNATI BUS. COURIER, Nov. 13-19 , 1989, at 1Google Scholar; Fikes, Bradley J., Redlining Has Small Firms Singing the Bad-Risk Blues, SAN DIEGO BUS. J., Sept. 21 , 1992, at 15Google Scholar.

² See infra note 26 and accompanying text; see also Altman, Dennis, AIDS IN THE MIND OF AMERICA 24-26 (1986)Google Scholar (explaining that people still perceive AIDS as largely a gay male disease); Centers For Disease Control, PROVISIONAL DATA, reprinted in PUBLIC POLICY DIMENSIONS— AIDS 258, 267 (Griggs, John ed., 1987)Google Scholar (stating that by December 1985, homosexual and bisexual males constituted 58.1% of adult AIDS cases reported in New York City; by the end of June 1986, homosexual and bisexual males represented 65.3% of adult AIDS cases in the United States and Europe).

³ Recent statistics from the United States Centers for Disease Control and Prevention (CDC) indicate that AIDS transmission is occurring more rapidly among women and minorities while the rate has moderated for homosexual white males. See Sheets, Gary, District’s AIDS Rate Again Tops the Nation, WASH. TIMES, Apr. 19 , 1996, at A3Google Scholar.

According to the World Health Organization (WHO), although homosexual transmission and intravenous drug use contribute to most HIV infection cases in industrialized countries, the trend is changing. See Tyson, Remer, AIDS Toll in Africa Continuing to Rise; Apart from a Cure or New Vaccine, Continent May Be Changed Forever, DALLAS MORNING NEWS, May 26 , 1996, at 26AGoogle Scholar.

Compared to ten years ago, the HIV infection rate among homosexual and bisexual males has dramatically decreased. See Holmberg, Scott D., The Estimated Prevalence and Incidence of HIV in 96 Large U.S. Metropolitan Areas, 86 AM. J. PUB. HEALTH 642, 642 (1996)CrossRefGoogle ScholarPubMed. A common method of transmission is through sexual activity among homosexual males, while other major forms of transmission involve unprotected sex among heterosexual partners and shared needles among intravenous drug users. See Miller, Joanna M., Fighting Back; Students Launch AIDS Awareness Week at High School, L.A. TIMES, Apr. 17 , 1996, at B1Google Scholar.

⁴ See Schatz, Benjamin, The AIDS Insurance Crisis: Underwriting or Overreaching?, 100 HARV. L. REV. 1782, 1783 (1987)CrossRefGoogle ScholarPubMed. Extrapolating from data relating to sexual behavior in males, in 1991 there were approximately 18 million men in the United States over the age of 16 who could be classified as homosexual or bisexual. See id. at 1783 n.9. The total number of projected AIDS cases that year was 270,000. See id. at 1782. As a result, 1.5% or less of the gay or bisexual men will have AIDS because not all of the 270,000 people projected to have AIDS will be gay or bisexual men. See id. at 1783 n.9. The current trend in the spread of AIDS in the United States is shifting away from homosexuals and toward persons who inject drugs. See Unks, supra note 1, at 205. Nevertheless, the impression of AIDS as a primarily homosexual disease lingers in the minds of many Americans because the initial diagnosis of the disease originated in homosexual males. See id.

⁵ See Africa in the Plague Years, NEWSWEEK, Nov. 24 , 1986, at 44, 44Google Scholar. WHO reported that HIV infections result most often from heterosexual transmission. See Tyson, supra note 3, at 26A. Every day, HIV infects 7500 people and more than 75% of the cases result from heterosexual transmission. See Mseteka, Buchizya, AIDS Hits Africa Most, but Asia Set to Overtake, Reuters, Apr. 28 , 1996Google Scholar, available in LEXIS, News Library, Curnws File. Wide practice of prostitution has caused the rapid spread of AIDS among the heterosexual population in Africa and Asia. See Scientists Hone Knowledge of How Virus Spreads, WALL ST. J., May 1 , 1996, at A6Google Scholar.

⁶ See Schatz, supra note 4, at 1783. Heterosexual transmission of AIDS constituted four per cent of the total number of reported AIDS cases in 1986. See Centers For Disease Control And Prevention, U.S. Dep'T of Health & Human Servs., AIDS WEEKLY SURVEILLANCE REPORT 1 (Feb. 16 , 1987)Google Scholar [hereinafter WEEKLY SURVEILLANCE REPORT]. Projections expect the percentage to more than double and rise to nine percent by 1991. See Future Shock, NEWSWEEK, Nov. 24 , 1986, at 30,31Google Scholar.

⁷ See Widiss, Alan I., To Insure or Not to Insure Persons Infected with the Virus that Causes AIDS, 77 IOWA L. REV. 1617, 1664 (1992)Google ScholarPubMed. Of 41,000 new HIV infection cases per year, half occur among intravenous drug users. See Holmberg, supra note 3, at 642. By the end of 1995, intravenous drug use-related transmission comprised 36% of all AIDS cases reported to the CDC. See AIDS Associated with Injection-Drug Use—United States, 1995, 45 Morbidity & Mortality Wkly. Rep. (U.S. Dep't Health & Human Servs.) No. 19, at 392 (May 17 , 1996)Google Scholar. The recent rise in heroin use has added to concerns over AIDS transmission because injection drug users constitute the fastest increase in new HIV infection cases. See Leland, John et al., The Fear of Heroin Is Shooting Up, NEWSWEEK, Aug. 26 , 1996, at 55, 55Google Scholar.

⁸ See infra notes 27-30 and accompanying text.

⁹ See Insurers “Can't Cut Magic Loose,” AIDS WKLY., Oct. 12 , 1992, at 9, 9Google Scholar. Furthermore, some health insurance industry executives once assessed annual payments of approximately $50 billion in death benefits for AIDS policyholders by the beginning of the next century. See id.

¹⁰ See Sohlgren, Eric C., Article, Group Health Benefits Discrimination Against AIDS Victims: Falling Through the Gaps of Federal Law—ERISA, the Rehabilitation Act and the Americans with Disabilities Act, 24 LOY. L.A. L. REV. 1247, 1255 (1991)Google Scholar.

According to a congressional study on “AIDS and Health Insurance,” 86% of health insurance companies in the United States screened applicants for HIV and half of the studied insurers tested selected applicants for the virus. See Cohen, Roberta & Wiseberg, Laurie S., HUMAN RIGHTS INTERNET, DOUBLE JEOPARDY—THREAT TO LIFE AND HUMAN RIGHTS, DISCRIMINATION AGAINST PERSONS WITH AIDS 38 (1990)Google Scholar.

Insurers focus on applicants who have received blood transfusions and administer blood tests to screen people for exposure to AIDS. See Schatz, supra note 4, at 1783, 1795. In addition, many insurers have used the Enzyme-Linked Immunosorbent Assay (ELISA) test to detect the presence of the antibody to the AIDS virus in human serum and plasma. See Nemer, Kirk D., AIDS and Discrimination: Legal Limits of Insurance Underwriting Practices, in AIDS LEGAL, LEGISLATIVE, AND POLICY ISSUES 283, 294-95 (Quist, Norman ed., 1989)Google Scholar.

For a more detailed discussion of the processes of underwriting and redlining, see infra Part II.

¹¹ See Hoffman, Joyce Nixson & Kincaid, Elizabeth Zieser, AIDS: The Challenge to Life and Health Insurers’ Freedom of Contract, 35 DRAKE L. REV. 709, 723 (1986-87)Google Scholar. People suspected of being infected with AIDS have encountered greater difficulty in retaining and obtaining health, disability and life insurance coverage. See Lambert, Bruce, AIDS Insurance Coverage Is Increasingly Hard to Get, N.Y. TIMES, Aug. 7 , 1989, at A1Google Scholar.

¹² See, e.g., Bruner, James R., AIDS and ERISA Preemption: The Double Threat, 41 DUKE L.J. 1115, 1125 (1992)CrossRefGoogle ScholarPubMed; Hartigan, Patti, Arts World Confronts the Disease that Has Devastated It, BOSTON GLOBE, Nov. 29 , 1993, at 1Google Scholar.

Insurers may refuse to offer health insurance coverage to someone who is homosexual for fear that he is at high risk for contracting AIDS. Businesses perceived to have a disproportionate number of homosexual employees complain that they suffer from insurance redlining, the refusal by insurers to cover certain businesses. See Watson, Traci et al., Is. There a “Gay Gene"?, U.S. NEWS & WORLD REP., Nov. 13 , 1995, at 93, 93Google Scholar.

¹³ See Neus, Elizabeth, Health Insurance Problems Were Highlighted by AIDS, Gannett News Serv., July 13 , 1995Google Scholar, available in LEXIS, News Library, Gns File; Schatz, supra note 4, at 1785; see also Developments in the Law: Sexual Orientation and the Law. Part 2 of 2, 102 HARV. L. REV. 1584, 1663 (1989)Google Scholar (commenting that the impact of AIDS on the insurance industry has negatively affected the ability of homosexual men to obtain life and health insurance); Freudenheim, Milt, Health Insurers, to Reduce Losses, Blacklist Dozens of Occupations, N.Y. TIMES, Feb. 5 , 1990, at A1Google Scholar (“Arts and dance groups and people like florists and interior designers say their groups are often unfairly excluded on the mistaken assumption that their employees are likely to contract the AIDS virus.”); Hartigan, supra note 12, at 5 (asserting that the executive director of Theatre Communications Group, a New York-based service agency, stated he had trouble finding an insurer after an employee on the staff died of AIDS, and that an insurance company told him that if the name of his agency did not include the word theater, he would not encounter problems when obtaining insurance); Tuller, David & Olszewski, Lori, New Crisis in Health Insurance: Higher Premiums, Blacklists Reported, S.F. CHRON., Feb. 26 , 1990, at A1Google Scholar (stating that the owner of a New York hair salon had difficulty locating willing insurers).

¹⁴ Insurance Co. Denies Anti-Gay Bias, PHILADELPHIA GAY NEWS, Aug. 29 , 1985, at 9Google Scholar.

¹⁵ Accord Reached on Eve of Trial in Landmark Discrimination Suit, 5 AIDS Pol'y & L. (BNA) No. 9, at 2 (May 16 , 1990Google Scholar).

¹⁶ See Schatz, supra note 4, at 1787 n.34.

¹⁷ See, e.g., Devroy, Ann, In Emotion-Filled Ceremony, Bush Signs Rights Law for America’s Disabled, WASH. POST, July 27 , 1990, at A18Google Scholar; Haar, Dan, Dentists Settle AIDS Victim’s Claim; East Hartford Practice Pays $20,000 to Estate, $9,000 Fine, HARTFORD COURANT, Jan. 14 , 1995, at E8Google Scholar; Refusal to Treat AIDS Patient Is Ruled a Violation, N.Y. TIMES, Nov. 22 , 1994, at A16Google Scholar; Tuller, David, Gays Article Success in Congress, S.F. CHRON., Dec. 24 , 1990, at A8Google Scholar.

¹⁸ See Schroeder, Michael, How Are Hair Salons Like Law Offices?, BUS. WK., Oct. 19 , 1992, at 98, 98Google Scholar. In 1992 alone, 16 states, including California and New York, passed comprehensive laws requiring that insurers offer coverage to all businesses. See id.

Redlining is a distinction based on the geographic location of risk and hence unlawful in Wisconsin as unfairly discriminatory, unless for a business purpose that is not a mere pretext for unfair discrimination. See NAACP v. American Family Mut. Ins. Co., 978 F.2d 287, 301 (7th Cir. 1992).

¹⁹ See generally Widiss, supra note 7, at 1663 (“Underwriting on the basis of factors such as ‘sexual orientation’ has been and continues to be vehemently criticized.”).

²⁰ See CENTERS FOR DISEASE CONTROL & PREVENTION, U.S. DEP'T OF HEALTH & HUMAN SERVS., HIV/AIDS SURVEILLANCE REPORT YEAR END EDITION, Vol. 7, No. 2, at 19 tbl. 13 (Dec. 1995) [hereinafter CDC SURVEILLANCE REPORT 1995].

As of September 30, 1992, the CDC had received reports of at least 242,146 cases of AIDS and 160,372 deaths resulting from AIDS. See Bartrum, Thomas E., Article, Fear, Discrimination and Dying in the Workplace: AIDS and the Capping of Employees’ Health Insurance Benefits, 82 KY. L.J. 249, 249 (1994)Google Scholar. At the end of 1992, AIDS cases in the United States surpassed 244,939. See Palmer, Lizzette, ERISA Preemption and Its Effects on Capping the Health Benefits of Individuals with AIDS: A Demonstration of Why the United States Health and Insurance Systems Require Substantial Reform, 30 HOUS. L. REV. 1347, 1349 & n.4 (1993)Google Scholar (citing Centers For Disease Control & Prevention, U.S. Dep'T Of Health & Human Servs., HIV/AIDS SURVEILLANCE REPORT 6 (1993))Google Scholar. By February 1994, the total rose to 339,250 Americans diagnosed with AIDS and 204,390 deaths resulting from the disease. See Mello, Jeffrey A., AIDS AND THE LAW OF WORKPLACE DISCRIMINATION 1 (1995)Google Scholar.

²¹ See CDC SURVEILLANCE REPORT 1995, supra note 20, at 19 tbl.13.

²² See id. at 5.

²³ See id. at 19 tbl.13. Estimates in 1993 suggested that between 330,000 and 385,000 people would die from AIDS by 1995. See Palmer, supra note 20, at 1350 n.8 (citing AIDS to Kill Over 330,000 by ′95, But Epidemic to Slow, Experts Say, HOUS. POST, Jan. 15 , 1993, at A11Google Scholar).

In 1992, approximately 33,590 people in the United States died from HIV infection, equaling 1.5% of total deaths. See Schmall, Lorraine, Toward Full Participation and Protection of the Worker with Illness: The Failure of Federal Health Law After McGann v. H & H Music Co., 29 WAKE FOREST L. REV. 781Google Scholar, 783 n.8 (citing Centers for Disease Control, Update: Mortality Attributable to HIV Infection Among Persons Aged 25-44 Years—United States, 1991 and 1992, 42 Morbidity & Mortality Wkly. Rep. (U.S. Dep't Health & Human Servs.) No. 45, at 869, 870 (Nov. 19 , 1993Google Scholar). In comparison, cancer deaths in the United States in 1991 totaled approximately 514,000. See id. at 783 n.7 (citing American Heart Ass'n, HEART AND STROKE FACTS: 1994 STATISTICAL SUPPLEMENT 1 (1993)Google Scholar; American Cancer Soc'y, CANCER FACTS & FIGURES 1994, at 1Google Scholar (1994)). Furthermore, there were 1,208,000 new cancer cases diagnosed in 1994 and about 538,000 people died from cancer that year. See id. Cardiovascular disease was the leading cause of death in the United States in 1991. See id. at 783 n.9 (citing AMERICAN HEART ASS'N, supra, at 2). There were 923,422 deaths from cardiovascular disease, representing 42.7% of all deaths in the nation. See id. Analysis of the statistics indicates that HIV-related deaths represent only a small proportion of total deaths as compared with other diseases.

²⁴ See Centers for Disease Control & Prevention, Projections of the Number of Persons Diagnosed with AIDS and the Number of Immunosuppressed HIV-infected Persons—United States, 1992- 1994, 269 JAMA 733, 733 (1993)CrossRefGoogle Scholar.

²⁵ See Dunlap, Mary C., AIDS and Discrimination in the United States: Reflections on the Nature of Prejudice in a Virus, 34 VILL. L. REV. 909, 912 n.10 (1989)Google ScholarPubMed.

²⁶ See WEEKLY SURVEILLANCE REPORT, supra note 6, at 1.

²⁷ See Rietmeijer, Cornelius A. et al., Cost of Care for Patients with Human Immunodeficiency Virus Infection, 153 ARCHIVES INTERNAL MED. 219, 219 (1993)CrossRefGoogle ScholarPubMed. In 1992, health and life insurers reportedly paid approximately $1.4 billion for AIDS-related claims. See 1992 AIDS Claims Reach $1.4 Billion, 2 Health L. Rep. (BNA) No. 34, at 1149 (Aug. 26 , 1993Google Scholar).

²⁸ See Japsen, Bruce, New Ryan White Bill Increases AIDS Funds, MOD. HEALTHCARE, May 27 , 1996, at 13Google Scholar. Recent statistics show that the cost in Baltimore for caring for each AIDS patient is about $102,000. See Purnick, Joyce, Another View of the War Against Drugs, N.Y. TIMES, May 23 , 1996, at B1Google Scholar.

²⁹ See Dunlap, David W., For AIDS Doctors, a Needed Tonic, N.Y. TIMES, Sept. 30 , 1996, at D9Google Scholar; SoRelle, Ruth, Triple Play on HIV, HOUS. CHRON., Sept. 9 , 1996, at 1AGoogle Scholar.

³⁰ See, e.g., Goldberg, Karen, Surviving Despite HIV: As Their Life Expectancy Grows, So Do Needs of AIDS Patients, WASH. TIMES, Feb. 26 , 1993, at A1Google Scholar.

³¹ See Nemer, supra note 10, at 291. Central to a risk classification system is the notion of expected loss. See id. After estimating the risk of loss of each applicant, the insurer groups the insureds with similar expected risks into the same category. See id. The insurer then determines premium rates in accordance with the anticipated risk of loss. See id.; see also MELLO, supra note 20, at 69; Ford, Bryan, The Uncertain Case for Market Pricing of Health Insurance, 74 B.U. L. REV. 109, 115-16(1994)Google Scholar.

Despite the prevalent practice of risk classification among health insurers, a study revealed that insurers flat out refuse certain businesses coverage at any price simply because of the type of businesses they are. See Schroeder, supra note 18, at 98. Insurers disregard consideration of the health status of the employees in those occupations and decide not to offer coverage based on the nature of the business. See id.

An executive of a company which manages employee benefit costs stated that not only are insurance companies and self-insured businesses increasingly excluding AIDS patients from coverage, but insurance providers are also denying coverage to healthy individuals who are considered to be at high risk. See Klein, Joanne Draus, The Price of AIDS, CORP. CLEVELAND, May 1991, at 16, 18Google Scholar. In particular, he cited hair salons and florists as examples of small business establishments that often have difficulty procuring insurance at a fair price, if they even are able to secure coverage in the first place. See id. Those firms, he said, generally have to pay several times the standard rate for insurance. See id.

Insurers often redline physician groups and law practices, followed by bars and taverns, hair salons and barber shops and entertainment-related firms. See Zellers, Wendy K. et al., Small Business Insurance: Only the Healthy Need Apply, HEALTH AFF., Spring 1992, at 174, 177CrossRefGoogle ScholarPubMed.

³² Lee, Carol, Comment, Creating a Genetic Underclass: The Potential for Genetic Discrimination by the Health Insurance Industry, 13 PACE L. REV. 189, 202 n.101 (1993)Google ScholarPubMed (quoting MERRITT Co., GLOSSARY OF INSURANCE TERMS 210 (Green Thomas E. ed., 1987)).

³³ See Bruner, supra note 12, at 1120.

³⁴ See Clifford, Karen A. & Iuculano, Russel P., AIDS and Insurance: The Rationale for AIDS- Related Testing, 100 HARV. L. REV. 1806, 1807 n.8 (1987)CrossRefGoogle ScholarPubMed (citing Health Ins. Ass'n of Am., A COURSE IN GROUP LIFE AND HEALTH INSURANCE pt. A, at 379 (1985))Google Scholar.

³⁵ See Schatz, supra note 4, at 1786 n.30 (citing Sheehy, A., Health Insurance and AIDS, in AIDS: LEGAL ASPECTS OF A MEDICAL CRISIS 463-64 (1986)Google Scholar).

³⁶ See Tomes, Jonathan P., The “Community" in the Community Reinvestment Act: A Term in Search of a Definition, 10 ANN. REV. BANKING L. 225, 225 (1991)Google Scholar.

³⁷ See Swidler, Gary M., Making the Community Reinvestment Act Work, 69 N.Y.U. L. REV. 387, 390 (1994)Google Scholar; Tomes, supra note 36, at 226-27.

³⁸ See Comment, Redlining: Potential Civil Rights and Sherman Act Violations Raised by Lending Policies, 8 IND. L. REV. 1045, 1045 n.l (1975)Google Scholar.

³⁹ See generally Widiss, supra note 7, at 1592 (noting that in the context of insurance, for ex ample, some insurers would decline to offer coverage to people residing in specific, high-risk urban areas).

⁴⁰ See Nemer, supra note 10, at 292.

⁴¹ According to insurers, without the underwriting process, people with average utilization patterns would be required to subsidize those with higher utilization rates, which is unfair to individuals who file fewer claims. See Oppenheimer, Gerald M. & Padgug, Robert A., AIDS and the Crisis of Health Insurance, in AIDS & ETHICS 105, 114 (Reamer, Frederic G. ed., 1991)Google Scholar. Further, insurers argue that sound underwriting provides a method of identifying and eliminating risk groups with high utilization patterns. See id.

⁴² See Nemer, supra note 10, at 292.

⁴³ See Jacobson, Don & Sussman, David, Special Focus: Insurance; the Quest to Expand Access to Health Care Coverage, MINNEAPOLIS-ST. PAUL CITY BUSINESS, Jan. 22 , 1993, at 11Google Scholar.

⁴⁴ See AIDS Claims Remain Flat: Study, BUS. INS., Aug. 19 , 1996, at 35, 35Google Scholar. In 1995, group life insurance companies paid $571.4 million in AIDS-related claims, representing a small increase over the $562.9 million in 1994. See id. Group health insurers paid approximately the same amount, $446 million, in both 1994 and 1995. See id.

⁴⁵ See id.

⁴⁶ For a brief discussion of the insurance industry’s concerns over the possibility that the AIDS epidemic would financially cripple the insurance business, see Schatz, supra note 4, at 1794.

⁴⁷ See Mary Ellen Hombs, AIDS CRISIS IN AMERICA 15 (1992)Google Scholar (citing National Comm'n on Acquired Immune Deficiency Syndrome, AMERICA LIVING WITH AIDS: REPORT OF THE NATIONAL COMMISSION ON AIDS 68 (1991)Google Scholar).

⁴⁸ See Zellers et al., supra note 31, at 174. The interviews included discussions of the following issues: (1) the period of time the respondent had offered health plans in general and for small businesses in particular; (2) the minimum and maximum size of businesses to which the respondent offered insurance; (3) the types of plans available for small businesses; (4) criteria for employee eligibility; (5) mandatory employer contributions; (6) the variation in the amount charged for large and small businesses; and (7) whether the respondent believes small businesses have difficulty purchasing health insurance and the reasons for that, if any. See id. at 176.

⁴⁹ The study revealed that approximately 15% of all small businesses in the United States can not secure health insurance for employees. See Jacobson & Sussman, supra note 43, at 11.

⁵⁰ See Zellers et al., supra note 31, at 176.

⁵¹ See id.

⁵² See id. Employers such as law firms, medical offices, bars, restaurants and hair salons often face rejection when trying to obtain coverage at any price, regardless of the health status of their employees. See Schroeder, supra note 18, at 98.

⁵³ See Zellers et al., supra note 31, at 176. Citing reasons such as a high incidence of AIDS cases in the retail industry in general, an insurer informed one of its policyholders, a chain of retail specialty furniture stores, of its intent to cancel the existing policy. See Owens v. Storehouse, Inc., 984 F.2d 394, 396 (11th Cir. 1993). Following negotiations between the two sides, the insurer renewed the policy, but drastically modified the terms of the agreement. See id. Specifically, the new policy provided less coverage, was more costly and was only guaranteed for six months. See id. In addition, the new policy required that the furniture store remain self-insured for the first $75,000 in AIDS-related claims, as opposed to $25,000 for other participants in the plan. See id.

⁵⁴ See Zellers et al., supra note 31, at 177.

⁵⁵ See id. The top two most frequently excluded industries were physician groups (high utilization) and law firms (too litigious). See id. Only two respondents listed the explosives manufacturing and distributing industry as ineligible whereas 16 listed hair salons as ineligible. See id. Moreover, seven respondents declared ineligible the entertainment business, another industry perceived as employing an above average number of homosexual males. See id.

⁵⁶ See Insurers in Texas Found to Deny Coverage for Conditions Like AIDS, 2 Health L. Rep. (BNA) No. 16, at 506, 506-07 (Apr. 22 , 1993)Google Scholar.

⁵⁷ See id. at 507.

⁵⁸ See id.

⁵⁹ See id.

⁶⁰ See id.

⁶¹ See id.

⁶² See id.

⁶³ See Texas Governor Endorses Bill to Make Coverage Available to Small Employers, BNA Health Care Daily, Mar. 25 , 1993Google Scholar, available in LEXIS, BNA Library, Bnahlt File. Approximately four million Texas residents did not have health insurance coverage in 1993. See Stutz, Terrence, Richards Backs Health Insurance Bill; Plan Targets Small business Concerns, DALLAS MORNING NEWS, Mar. 18 , 1993, at 23AGoogle Scholar. State officials estimated that the uninsured population included 1.2 million employees of 320,000 small businesses in Texas. See id.

⁶⁴ See id.; H.B. 2055, 73d Leg. Sess., 1993 Regular Sess. (Tex. 1993).

⁶⁵ See H.B. 2055.

⁶⁶ See Richards Signs Insurance, “Potty Parity" Bills, UPI, June 15 , 1993Google Scholar, available in LEXIS, News Library, UPI File; see also TEX. INS. CODE ANN. art. 26.21 (West Supp. 1997).

⁶⁷ See TEX. INS. CODE ANN. art. 26.21(m).

⁶⁸ See Stutz, supra note 63, at 23A.

⁶⁹ See Unfair Business Practices Charged Against Underwriter, 3 AIDS Pol'y & L. (BNA) No. 15, at 6 (Aug. 10 , 1988Google Scholar) [hereinafter Unfair Business Practices].

⁷⁰ See id.

⁷¹ See id.

⁷² See id.

⁷³ See id.; see also Sex Orientation Bias Plaintiff May Proceed with Pseudonym, 2 AIDS Pol'y & L. (BNA) No. 24, at 9 (Jan. 11 , 1989)Google Scholar. Although it finally agreed to issue the policy, the insurer added a $105 surcharge to Doe’s premium. See id.

⁷⁴ See Unfair Business Practices, supra note 69, at 7.

⁷⁵ See id.

⁷⁶ See Jacoby, Tamar, Who Will Pay the AIDS Bill?, NEWSWEEK, Apr. 11 , 1988, at 71, 71Google Scholar.

⁷⁷ See id.

⁷⁸ See id.

⁷⁹ See id.

⁸⁰ See Insurers Too Are Afraid of AIDS, FORTUNE, Sept. 15 , 1986, at 127, 127CrossRefGoogle Scholar [hereinafter Afraid of AIDS].

The following questions appeared in a questionnaire which the Great Republic Insurance Company (Great Republic) appended to the applications of certain applicants:

• 9. Have you had a weight loss or gain of ten pounds or more during the past twelve months?

• 10. Have you experienced any symptoms or complaints or other deviations from good health during the past six months?

• 11. Have you had, or been diagnosed, or treated, or been advised to be tested for any sexually transmitted disease or immune disorder?

GREAT REPUBLIC INS. CO., ADDENDUM TO APPLICATION FOR THE SOLUTION (n.d.).

⁸¹ See Memorandum from Bill Pritchett of Great Republic Insurance Company to All Agents and General Agents (Dec. 1985). The company targeted “restaurant employees, antique dealers, interior decorators, consultants, florists, and people in the jewelry or fashion business" because they had comprised a disproportionate share of AIDS cases. Id. Through research and studies of claim files of those insureds who suffer from AIDS, the company devised “a profile of the person most likely to have or get" AIDS. Id. The practice of sending the supplemental health statement to selected applicants represented a method to deal with the concern over potential AIDS claims. See id. The memorandum suggested that Great Republic would decline an applicant who answered yes to any of the three questions on the questionnaire. See id. Only those who answered no to all three questions would receive coverage. See id.; see also Jacoby, supra note 76, at 71; Afraid of AIDS, supra note 80, at 127.

⁸² See Jacoby, supra note 76, at 71.

⁸³ See Tuller, David, Gay-Bias Insurance Suit Is Settled, S.F. CHRON., May 4 , 1990, at A4Google Scholar.

⁸⁴ See id.

⁸⁵ See Weiss, Lawrence D., NO BENEFIT: CRISIS IN AMERICA’S HEALTH INSURANCE INDUSTRY 36 (1992)Google Scholar.

⁸⁶ See Tuller, supra note 83, at A4.

⁸⁷ See supra notes 11-13 and accompanying text.

⁸⁸ See Warren, James, Risky Business? Gay Hairdresser Stereotype at Issue in a Health Insurance Dispute, CHI. TRIB., Aug. 15 , 1993, § 5, at 2Google Scholar.

⁸⁹ See id. National Group Life Insurance Company has acknowledged that it refused to provide coverage to hairdressers, florists and interior decorators. See Housewright, Ed, Man Alleges in Law suit He Was Fired Over AIDS; Firm Denies Bias, Says He Was Disruptive in Office, DALLAS MORNING NEWS, May 16 , 1994, at 15AGoogle Scholar.

⁹⁰ See Warren, supra note 88, at 2. In general, insurance companies use results from medical history questionnaires, physical evaluations and medical testing to determine whether to issue policies to health insurance applicants. See WEISS, supra note 85, at 31.

⁹¹ See Warren, supra note 88, at 2.

⁹² See id.

⁹³ Brewer is not homosexual and the company did not even test her for HIV or AIDS before denying coverage. See Housewright, Ed, Hair Stylist Says Insurer’s Bias Led to Rejection; Company Denies Targeting Jobs Linked to Gay Men in Refusal of Medical Coverage, DALLAS MORNING NEWS, May 5 , 1994, at 1AGoogle Scholar [hereinafter Insurer’s Bias]. Following the incident involving National Group Life Insurance Company, Brewer obtained coverage from the State Farm Insurance Company after the company gave her the usual tests. See id.

⁹⁴ See Warren, supra note 88, at 2.

⁹⁵ See id.

⁹⁶ See Insurers’ Bias, supra note 93, at 1 A.

⁹⁷ See Warren, supra note 88, at 2.

⁹⁸ Id. According to data from the U.S. Bureau of Labor Statistics, however, “[h]airdressing is far safer than the average occupation.” See Insurer’s Bias, supra note 93, at 1A.

⁹⁹ Warren, supra note 88, at 2.

¹⁰⁰ See id.

¹⁰¹ See Bunis, Dena, AIDS in the Workplace: Coping with Fear of Losing Job, Insurance, N.Y. NEWSDAY, Nov. 5 , 1989, at 94Google Scholar.

¹⁰² See id.

¹⁰³ See id.

¹⁰⁴ See id.

¹⁰⁵ See id.

¹⁰⁶ See id.

¹⁰⁷ See Glendenning, G. William & Holtom, Robert B., PERSONAL LINES UNDERWRITING 498 (1977)Google Scholar.

¹⁰⁸ See Austin, Regina, The Insurance Classification Controversy, 131 U. PA. L. REV. 517, 543 (1983)CrossRefGoogle Scholar. Other businesses, such as magazine publishers, political parties and product marketers, also utilize ZIP codes as an aid in their enterprising efforts. See id.

¹⁰⁹ See Wortham, Leah, The Economics of Insurance Classification: The Sound of One Invisible Hand Clapping, 47 OHIO ST. L.J. 835, 849 (1986)Google Scholar.

¹¹⁰ See Swidler, supra note 37, at 390.

¹¹¹ See Texas Agency Tells Firm to Stop Using ZIP Codes to Set Testing Requirements, 4 AIDS Pol'y & L. (BNA) No. 5, at 1, 12 (Mar. 22 , 1989)Google Scholar [hereinafter Agency Tells Firm to Stop].

¹¹² See id.

¹¹³ See id. The Texas legislature designed the statute to identify and prohibit practices in the insurance industry which qualify as “unfair methods of competition or unfair or deceptive acts.” TEX. INS. CODE ANN. § 1(a) (West 1995). In particular, unfair discrimination refers to:

Id. § 4(7)(a).

¹¹⁴ An acceptable justification for using ZIP codes to screen applicants would be that ZIP codes represent an effective method of classification that would diminish the likelihood of forcing those at low risk for developing HIV to bear higher premiums in order to pay health costs for those at high risk. See generally Oppenheimer & Padgug, supra note 41, at 113 (distinguishing fair discrimination from unfair discrimination by examining the nature of the discriminatory practice).

¹¹⁵ See Agency Tells Firm to Stop, supra note 111, at 12.

¹¹⁶ See id.

¹¹⁷ See New Jersey Charges Insurer with ZIP Code Redlining, 5 AIDS Pol'y & L. (BNA) No. 20, at 4 (Oct. 31 , 1990Google Scholar).

¹¹⁸ See id. These areas encompassed most of northeastern New Jersey, New Brunswick and eastern Monmouth County in central New Jersey and Ocean County in the southern part of the state. See id.

¹¹⁹ See id.

¹²⁰ See id.

¹²¹ NAIC consists of a group of the nation’s insurance regulators. See Schatz, supra note 4, at 1789.

¹²² National Ass'n of Ins. Comm'rs, MEDICAL/LIFESTYLE QUESTIONS AND UNDERWRITING GUIDELINES (1988)Google Scholar. In 1988, NAIC agreed to extend application of the underwriting guidelines (Guidelines) to health maintenance organizations. See id.

All of the General Propositions prohibit insurers from using sexual orientation as a factor in underwriting:

• A. No inquiry in an application for health or life insurance coverage, or in an investigation conducted by an insurer or an insurance support organization on its behalf in connection with an application for such coverage, shall be directed toward determining the applicant’s sexual orientation.

• B. Sexual orientation may not be used in the underwriting process or in the de termination of insurability.

• C. Insurance support organizations shall be directed by insurers not to investigate, directly or indirectly, the sexual orientation of an applicant or a beneficiary.

Id.

In addition, the Guidelines prohibit the use of the “marital status, the ‘living arrangements,’ the occupation, the gender, the medical history, the beneficiary designation, [or] the zip code or other territorial classification of an applicant" to “establish, or aid in establishing, the applicant’s sexual orientation.” Id. Furthermore, insurers may impose territorial rates “only if the rates are based on sound actuarial principles or are related to actual or reasonably anticipated experience.” Id.

By adopting the NAIC Guidelines as a foundation, Georgia imposed regulations designed to control strictly the type of medical or lifestyle questions that insurance providers in the state may ask applicants. See New Georgia Regulations Set Parameters for Questionnaires, 4 AIDS Pol'y & L. (BNA) No. 3, at 8 (Feb. 22 , 1989)Google Scholar. Not only do the regulations stipulate the sort of questions insurers may ask, but they also provide details relating to how insurers may phrase questions. See id. While insurers may ask questions that may disclose existing medical conditions, the regulations prohibit any attempt to determine an applicant’s sexual orientation. See id. at 9.

¹²³ National Ass'n Of Ins. Comm'rs, MEDICAL/LIFESTYLE QUESTIONS AND UNDERWRITING GUIDELINES, LEGISLATIVE HISTORY OF THE PROCEEDINGS OF THE NAIC (Oct. 1989)Google Scholar.

¹²⁴ See id.

¹²⁵ See American Council Of Life Ins. & The Health Ins. Ass'n of Am., AIDS SURVEY OF MEMBER COMPANIES (Aug. 19 , 1986)Google Scholar.

¹²⁶ See Widiss, supra note 7, at 1663. In addition, insurers apparently have not always followed the Guidelines. See Nemer, supra note 10, at 293.

¹²⁷ The insurance industry continues to have great latitude in making underwriting decisions because the regulations are limited in their scope. See Bovbjerg, Randall R., AIDS and Insurance: How Private Health Coverage Relates to HIV/AIDS Infection and to Public Programs, 77 IOWA L. REV. 1561, 1570(1992)Google ScholarPubMed.

¹²⁸ See Discrimination: Insurers Accused of Redlining Neighborhoods, HEALTH LINE (Am. Pol. Network, Inc.), Aug. 17 , 1993Google Scholar.

¹²⁹ See Jacobson & Sussman, supra note 43, at 11. For a more detailed description of the University of Michigan study on insurance industry practices with respect to small businesses, see supra notes 48-55 and accompanying text.

¹³⁰ For example, a California statute provides that:

CAL. INS. CODE § 10140(b) (West 1995). In Colorado, “[u]sing information about gender, marital status, medical history, occupation, residential living arrangements, beneficiaries, ZIP codes, or other territorial designations to determine sexual orientation" constitutes an unfair method of competition or unfair or deceptive act in the insurance market. COLO. REV. STAT. § 10-3-1104(1)(f)(VII) (1994). Similarly, the District of Columbia, Vermont and numerous other states prohibit such discriminatory practices against persons suspected to be homosexual. See, e.g., D.C. CODE ANN. § 35-230(d) (1994); VT. STAT. ANN. tit. 8, § 4724(2)(C) (1994); see also FLA. STAT. ch. 627.429 (1994).

¹³¹ See, e.g., CAL. INS. CODE § 10140(b); COLO. REV. STAT. § 10-3-1104(1)(f)(VII); D.C. CODE ANN. § 35-230(d); FLA. STAT. ch. 627.429; VT. STAT. ANN. tit. 8, § 4724(2)(C).

Statutes in Colorado and Vermont prohibit either direct or indirect questioning by insurance providers as to the applicant’s sexual orientation. See COLO. REV. STAT. § 10-3-1104(1)(f)(VI); VT. STAT. ANN. tit. 8, § 4724(2)(C)(i). While insurers may ask whether the applicant had previously tested positive for HIV or other medical conditions associated with the virus, they may not ask whether the applicant had been tested for or had received a negative result from a test for HIV or for other related conditions. See, e.g., KY. REV. STAT. ANN. § 304.12-013(4)(e) (Michie 1995); OHIO REV. CODE ANN. § 3901.45(C)(3) (Anderson 1995). In addition, some statutes prohibit insurers from inquiring about whether the applicant had ever been diagnosed with AIDS or other AIDS-related illnesses. See, e.g., OHIO REV. CODE ANN. § 3901.45(C)(2).

¹³² See Jackson, Mark H., Health Insurance: The Battle Over Limits on Coverage, in AIDS AGENDA: EMERGING ISSUES IN CIVIL RIGHTS 147, 167 (Hunter, Nan D. & Rubenstein, William B. eds., 1992)Google Scholar.

¹³³ See CAL. CIV. CODE § 51 (West 1994).

¹³⁴ See id.

¹³⁵ See National Gay Rights Advocates v. Great Republic Life Ins. Co., No. 857323 (Cal. Super. Ct. Oct. 7, 1988); Court Rejects Summary Action in Insurance Bias Lawsuit, 3 AIDS Pol'y & L. (BNA) No. 19, at 4 (Oct. 19 , 1988)Google Scholar [hereinafter Insurance Bias Lawsuit].

¹³⁶ See Insurance Bias Lawsuit, supra note 135, at 4.

¹³⁷ See, e.g., Harris v. Capital Growth Investors XIV, 805 P.2d 873, 877 (Cal. 1991) (citing In re Cox, 474 P.2d 992 (Cal. 1970)) (explaining that the language and history of the Unruh Act Civil Rights Act of California (Unruh Act) reveal that, in addition to the enumerated bases of discrimination, the legislature intended to prohibit other arbitrary discrimination by businesses); Schmidt v. Superior Ct. of Santa Barbara County, 769 P.2d 932, 935 (Cal. 1989) (citing In re Cox, 474 P.2d 992).

¹³⁸ See Insurance Bias Lawsuit, supra note 135, at 4.

¹³⁹ CAL. CIV. CODE § 51.5 (West 1994). For cases applying the Unruh Act, see, for example, Kirsh v. State Farm Mut. Auto Ins. Co., 284 Cal. Rptr. 260, 266 (Ct. App. 1991) (holding that an insurance company, by failing to provide coverage for pregnancy-related expenses, violated the Unruh Act’s prohibition of discrimination by business establishments based on sex); Pine v. Tom- son, 160 Cal. App. 3d. 370, 383 (Ct. App. 1984) (affirming the intent of the legislature to broadly apply section 51.5 of the Unruh Act and interpreting the term “business establishment" as used under section 51.5 to be consistent as used under section 51).

¹⁴⁰ TEX. INS. CODE ANN. § 7(a) (West 1994).

¹⁴¹ See MINN. STAT. § 62L.02 (1993). Qualified health insurance carriers include those participating in the small employer market by offering, selling, issuing or renewing a health benefit plan to small employers or to eligible employees of small employers. See id.

¹⁴² See Jacobson & Sussman, supra note 43, at 11.

¹⁴³ See supra notes 48-55 and accompanying text.

¹⁴⁴ See generally Schroeder, supra note 18, at 98 (addressing the redlining issue, Paul Cooper, vice-president for health-care policy at Prudential Insurance Company of America, stated that “we know there are abuses, and they need to be fixed”).

¹⁴⁵ While Medicaid’s financing of HIV-related health care costs increased from 25% to 41%, funding by private insurance entities decreased from 49% to 43% over the same period. See Jesse Green & Peter S. Arno, The “Medicaidization" of AIDS: Trends in the Financing of HIV-Related Medical Care, 246 JAMA 1261, 1261 (1990).

¹⁴⁶ See Jackson, supra note 132, at 147; see also Bartlett, Lawrence, Financing Health Care for Persons with AIDS: Balancing Public and Private Responsibilities, in AIDS AND THE HEALTH CARE SYSTEM 211, 218 (Gostin, Lawrence O. ed., 1990)Google Scholar (arguing that although HIV-positive persons who have either lost or cannot obtain private health care coverage can theoretically acquire coverage from Medicare and Medicaid, “the protection offered to persons with AIDS by Medicare is virtually nonexistent, whereas the coverage provided by Medicaid varies considerably across the country”).

According to the director of client services of an insurance analysis firm, about one to three percent of those with health insurance coverage account for about a quarter of the claims. See Klein, supra note 31, at 16. A majority of the claims comes from AIDS patients. See id. To counter the rise in the payment of AIDS claims, insurance providers shift the cost burden to social programs, such as Medicaid, by capping coverage and screening applicants. See id.

Because many AIDS patients are unable to obtain insurance, HIV-positive people constitute a disproportionately large number of Medicaid recipients. See Bartlett, John G. & Finkbeiner, Ann K., THE GUIDE TO LIVING WITH HIV INFECTION 222 (1991)Google Scholar. In 1991, about 40% of AIDS patients received Medicaid and the percentage was following an increasing trend. See id.

¹⁴⁷ For statistics illustrating the decline of the private insurance industry’s share of HIV-related expenses and the concurrent rise of Medicaid’s share, see supra note 145. Because of the insurance industry’s refusal to cover AIDS expenses, the burden has been shifted into the public sector. See Stone, Deborah A., AIDS and the Moral Economy of Insurance, AM. PROSPECT, Spring 1990, at 69, 70Google Scholar.

¹⁴⁸ See Oppenheimer & Padgug, supra note 41, at 112. A survey which the Congressional Office of Technology Assessment conducted in 1988 disclosed that an applicant’s sexual orientation played a role in the underwriting decisionmaking process of 30% of the responding commercial insurers. See id. (citing OFFICE OF TECH. ASSESSMENT, MEDICAL TESTING AND HEALTH INSURANCE, OTA-H-384 (1988)).

¹⁴⁹ See Schroeder, supra note 18, at 98.

¹⁵⁰ See Oppenheimer & Padgug, supra note 41, at 122.

¹⁵¹ See id. at 104.

¹⁵² See ACLU AIDS Project, Epidemic Of Fear: A SURVEY OF AIDS DISCRIMINATION IN THE 1980s AND POLICY RECOMMENDATIONS FOR THE 1990s 24-26, 74-78 (1990)Google Scholar.

¹⁵³ See Sohlgren, supra note 10, at 1259. In 1995, cardiovascular diseases caused the most deaths in the United States, incurring total costs of approximately $137.7 billion. See Fitzgerald, Brenda, Reforming Medicare: What Congress Can Learn from the Health Plans of America’s Corporations, HERITAGE FOUND. REP., Oct. 30 , 1995, at 1, 1Google Scholar.

According to results from a CDC survey, smoking-related illnesses cost more than $50 billion in health care expenses in 1993, representing more than seven percent of all U.S. health care costs. See Medical Care Expenditures Attributable to Cigarette Smoking—United States, 1993, 43 Morbidity & Mortality Wkly. Rep. (U.S. Dep't Health & Human Servs.) No. 26, at 469 (July 8 , 1994)Google Scholar; Hilts, Philip J., Sharp Rise Seen in Smokers’ Health Care Costs, N.Y. TIMES, July 8 , 1994, at A12Google Scholar. The figure was twice as much as estimates for previous years. See id. In addition, smoking-related ailments also cause financial costs associated with medical leave from employment and premature death, totaling approximately $46 billion. See id.

Alzheimer’s, another serious disease in the United States, costs $82.7 billion in annual health care expenses and lost productivity. See Brownlee, Shannon, Hopeful Hunt for an Alzheimer’s Cure, U.S. NEWS & WORLD REP., Nov. 21 , 1994, at 89, 89Google Scholar. In 1991, the cost attributed to caring for a single patient during the four years between diagnosis of Alzheimer’s and death of the patient was $173,932. See A1Allen, , Research Yields Some New Insights on Process of Aging, COURIER-JOURNAL, July 16 , 1995, at 4HGoogle Scholar. By 1994, the figure had risen to $213,732. See id.

Furthermore, the risk of heart disease and several types of cancer increases with fat consumption. See Schulte, Brigid, Hold the Mayo! Sandwiches Full of Fat, HOUS. CHRON., Mar. 22 , 1995, at A2Google Scholar. Diseases associated with fat cause over 400,000 premature deaths annually and $200 billion in medical costs and lost wages. See id.

Despite these astoundingly high medical costs, the private insurance industry has not taken significant steps to identify and exclude those groups that may have higher risks for developing cardiovascular disease, Alzheimer’s and smoking-related illnesses by using arbitrary factors to aid them in refusing or limiting coverage. See Sohlgren, supra note 10, at 1259 (recounting that while health care costs resulting from heart attacks and organ transplants can exceed AIDS expenses, insurers continue to offer coverage for those conditions but attempt to limit AIDS coverage).

¹⁵⁴ See Schatz, supra note 4, at 1804-05.

¹⁵⁵ See Bartlett, supra note 146, at 220.

¹⁵⁶ See Schmall, supra note 23, at 783. For an example of how state legislation protected small businesses, see supra notes 63-68 and accompanying text.

¹⁵⁷ See Schmall, supra note 23, at 783.

¹⁵⁸ See German Alliance Ins. Co. v. Lewis, 233 U.S. 389, 408 (1914) (holding that because of the close relation to the public interest, a state has the right to regulate the insurance industry).

¹⁵⁹ See generally Freudenheim, supra note 13, at A1 (“Some critics of the insurance industry are also calling for national standards for insurers.”).

¹⁶⁰ See Smith, Leo, Reducing State Accountability to the Federal Government: The Suter v. Artist M. Decision to Dismiss Section 1983 Claims for Violating Federal Fund Mandates, 1992 WIS. L. REV. 1267, 1293Google Scholar (observing that agencies in the executive branch have become so extensive that even the President may encounter difficulties in controlling them); Armstrong, Steven Reed, Article, The Argument for Agency Self-Enforcement of Discovery Orders, 83 COLUM. L. REV. 215, 217-18 & n.11 (1983)CrossRefGoogle Scholar (stating that federal administrative agencies often confront problems of delay in regulatory affairs).

¹⁶¹ See OFFICE OF TECH. ASSESSMENT, supra note 148, at 7 (explaining that states impose taxes on receipts of insurance premiums).

¹⁶² See SEIDMAN, ANN & SEIDMAN, ROBERT B., STATE AND LAW IN THE DEVELOPMENT PROCESS: PROBLEM-SOLVING AND INSTITUTIONAL CHANGE IN THE THIRD WORLD 128-40 (1994)Google Scholar.

¹⁶³ Such states can follow the NAIC Guidelines when drafting the antiredlining legislation. For a more extensive discussion on the NAIC Guidelines, see supra notes 121-25 and accompanying text.

¹⁶⁴ See generally ASMUS, BARRY, CLINTONCARE: PUTTING GOVERNMENT IN CHARGE OF YOUR HEALTH 7-23 (1994)Google Scholar.

¹⁶⁵ See Freudenheim, supra note 13, at A1.

¹⁶⁶ See Lambert, supra note 11, at A1. Those unable to obtain coverage generally end up with no care or rely on government charity. See Schroeder, supra note 18, at 98.

Under certain circumstances, desperate patients deliberately impoverish themselves to qualify for Medicaid by using up their assets and even quitting their jobs. See Lambert, supra note 11, at A1.

¹⁶⁷ See supra notes 146, 166 and accompanying text.

¹⁶⁸ See Staroba, Kristin, Recasting Health Care, ASS'N MGMT., Oct. 1992, at 24, 28Google Scholar.

¹⁶⁹ See id. Numerous commentators have recognized that there is a health insurance crisis in the United States. See, e.g., Fisk, Catherine L., The Last Article About the Language of ERISA Preemption? A Case Study of the Failure of Textualism, 33 HARV. J. ON LEGIS. 35, 57 (1996)Google Scholar; Mars, Harvey S., An Overview of Title I of the Americans with Disabilities Act and Its Impact upon Federal Labor Law, 12 HOFSTRA L. REV. 251, 282 (1995)Google Scholar; Saunders, Jason B., International Health Care: Will the United States Ever Adopt Health Care for All?—A Comparison Between Proposed United States Approaches to Health Care and the Single-Source Financing Systems of Denmark and the Netherlands, 18 SUFFOLK TRANSNAT'L L.J. 711, 741 n.102 (1995)Google Scholar.

¹⁷⁰ See BUREAU OF CENSUS, U.S. DEP'T OF COMMERCE, STATISTICAL ABSTRACT OF THE UNITED STATES 1990, at 95 (1990). According to data from the Department of Commerce, private health insurers paid more than $139 billion of benefit expenditures in 1987 while Medicare and Medicaid accounted for more than $102 billion of expenditures. See id.

¹⁷¹ See Himmelstein, David U. & Woolhandler, Steffie, Cost Without Benefit, Administrative Waste in U.S. Health Care, 314 NEW ENG. J. MED. 441, 442-43 (1986)Google ScholarPubMed (explaining that the United States would save at least eight to ten percent of its total health care expenditures by adopting national health insurance, because it would eliminate most of the bureaucratic apparatuses required to administer and regulate the private reimbursement system).

Studies of health care expenditures in countries with different types of health care systems show that nations employing national health insurance have strong control over the proportion of their gross domestic product allocated for health care spending. See Pfaff, Martin, Differences in Health Care Spending Across Countries: Statistical Evidence, J. HEALTH POL. POL'Y & L., Spring 1990, at 1, 21-23Google ScholarPubMed. “[T]he more universal the coverage, the greater the scope of the public sector to act as a consumers’ cooperative [which] . . . permits the community to hold down the share of its income which it must take over to providers.” Id. at 22.

¹⁷² Basic coverage focuses on prevention and primary care services and limits coverage for in patient hospital services. See Stio, Angelo A., III, State Government: The Laboratory for National Health Care Reform, 19 SETON HALL L. REV. 322, 344 (1994)Google Scholar. A Blue Cross-Blue Shield insurance policy defined basic coverage to include “inpatient hospital service benefits, outpatient hospital service benefits, physician services benefits, ambulatory surgical facility service benefits, and supplemental accidental benefits.” Presley v. Blue Cross-Blue Shield, 744 F. Supp. 1051, 1057-58 (N.D. Ala. 1990).

¹⁷³ Under a universal health insurance scheme, private insurers would participate in claims processing instead of underwriting. See WEISS, supra note 85, at 108.

¹⁷⁴ See Majority of Persons Would Pay More to Keep Physician Choice, Survey Finds, 1 Health Care Pol'y Rep. (BNA) No. 9, at 411-12 (May 3 , 1993)Google Scholar.

¹⁷⁵ See Kirsch, Todd, Ball Memorial Hospital: Section 2 Sherman Act Analysis in the Alternative Health Care Delivery Market, 14 AM. J.L. & MED. 249, 250 n.5 (1988)Google ScholarPubMed. If offered a choice, 54% of the respondents to a 1993 Gallup survey for the American Medical Association stated that they would pay more to ensure the local availability of the latest medical technology. See Hamilton, Bill, Health Care Reform: A Public Opinion Overview, CAMPAIGNS & ELECTIONS, June/July 1993, at 30, 31Google Scholar. Furthermore, notwithstanding fears of misdiagnosis and expectation of cures, supply-driven demand continues to sustain the utilization of laboratory procedures, imaging needs and pharmaceutical and subspecialty services. See Koller, Christopher F., An Open Letter: Four Things to Keep in Mind, COMMONWEAL, Apr. 23 , 1993, at 5, 6Google Scholar.

¹⁷⁶ See generally Westerfield, Donald L., NATIONAL HEALTH CARE: LAW, POLICY, STRATEGY 32-33 (1993)Google Scholar. In the 1940s and 1950s, the use of community-rating to set health insurance rates was a widespread practice. See U.S. Gen. Accounting Office, Health Care: ROCHESTER’S COMMUNITY APPROACH YIELDS BETTER ACCESS, LOWER COSTS 18 (Jan. 1993)Google Scholar [hereinafter GAO REPORT], During the 1960s, while experience rating gradually took over as insurers marketed policies at lower costs, Rochester retained community-rating. See id.

¹⁷⁷ See Lack of Health Insurance Is Indeed a Real Crisis, U.S.A. TODAY, May 26 , 1993, at 12AGoogle Scholar [hereinafter Lack of Health Insurance].

¹⁷⁸ See GAO REPORT, supra note 176, at 14-15; Lack of Health Insurance, supra note 177, at 12A.

¹⁷⁹ See GAO REPORT, supra note 176, at 1 (reporting that between 1989 and 1991, 7.1% of the population in Rochester did not have health insurance while the national average was 13.7% and the New York State figure was 11.4%); Lack of Health Insurance, supra note 177, at 12A.

¹⁸⁰ See Lack of Health Insurance, supra note 177, at 12A.

¹⁸¹ See GAO REPORT, supra note 176, at 18-19 (explaining that community-rating results in all groups paying the same premium for the same benefit plan package, regardless of occupation, age, sex or health experience); see also Community Effort Enables Rochester to Improve Access, Cut Costs, GAO Says, 1 Health Care Pol'y Rep. (BNA) No. 2, at 75 (Mar. 15 , 1993)Google Scholar [hereinafter Com munity Effort].

¹⁸² See WESTERFIELD, supra note 176, at 32-33. Another advantage of the community-rating approach, in addition to increased access to health insurance, is the reduction of health care costs. See GAO REPORT, supra note 176, at 19. Community-rating encourages firms and insurers “to control aggregate health care costs because increases in community-wide costs would be directly reflected in the insurance rates" charged to all plan participants. Id.

¹⁸³ See Oppenheimer & Padgug, supra note 41, at 107.

¹⁸⁴ See GAO REPORT, supra note 176, at 9; Community Effort, supra note 181, at 75.

¹⁸⁵ See Finch, Camilla, Running for Cover; For Many, Community-Rating Law Improves Cover age, Raises Costs, CRAIN’S N.Y. BUS., June 7 -13, 1993, at 19, 19Google Scholar.

¹⁸⁶ See Widiss, supra note 7, at 1626.

¹⁸⁷ See Community Effort, supra note 181, at 75.

¹⁸⁸ See New Jersey Panels Unveil Outlines for Five Small Group, Individual Plans, 1 Health Care Pol'y Rep. (BNA) No. 12, at 538 (May 24 , 1993)Google Scholar.

¹⁸⁹ See id.

¹⁹⁰ See id. at 539.

¹⁹¹ See Schroeder, supra note 18, at 98. Health Insurance Association of America, representing insurance companies accounting for 85% of the private health insurance purchased in the United States, is the major trade group for the industry. See Schatz, supra note 4, at 1789 n.47.

¹⁹² See Schroeder, supra note 18, at 98.

¹⁹³ See New York’s Community-Rating Law Spurs Nationwide to Drop Major Medical, 1 Health L. Rep. (BNA) No. 1, at 13 (Sept. 17 , 1992)Google Scholar.

¹⁹⁴ See Schroeder, supra note 18, at 98.

¹⁹⁵ See id.

¹⁹⁶ Tuller & Olszewski, supra note 13, at A1.

¹⁹⁷ See supra part II.A-D.

¹⁹⁸ See Jackson, supra note 132, at 147.

¹⁹⁹ Thus far, the insurance industry has not provided evidence that shows that the policy adopted to redline certain groups is actuarially sound. See generally Jerry, Robert H. & Mansfield, Kyle B., Justifying Unisex Insurance: Another Perspective, 34 AM. U. L. REV. 329, 333 n.16 (1985)Google Scholar (citing Mackaay, E.K., ECONOMICS OF INFORMATION AND LAW 176-79 (1982)CrossRefGoogle Scholar) (defining an actuarially sound policy as one in which the price of insurance coincides with the actual cost).

²⁰⁰ See Widiss, supra note 7, at 1663 (advocating the use of HIV-antibody tests by insurers as a method of curbing the use of discretionary factors, including place of residence, occupation and beneficiary designation, in order to screen out individuals who are actually infected with HIV); cf. Rushing, William A., THE AIDS EPIDEMIC: SOCIAL DIMENSIONS OF AN INFECTIOUS DISEASE 200 (1995)Google Scholar (offering California and Wisconsin as examples of states that have promulgated legislation that prohibits insurers from considering HIV test results when issuing health insurance policies).

²⁰¹ Programs that do not reach the level of a completely government-sponsored national health insurance system will function more effectively and equitably if they are united with propositions that address, both directly and indirectly, the issue of discrimination. See Oppenheimer & Padgug, supra note 41, at 123.

²⁰² See Schatz, supra note 4, at 1805.