If you have a disability,
chances are you have a hard time getting inexpensive insurance (or any private
insurance) and a job.
As someone actively
involved in disability rights, I regularly hear from disabled people who have
been discriminated against by insurance companies.
The Rev. Clyde Shideler,
who is blind, wrote me, "I have been denied insurance and given rates so high
that I could not possibly afford to pay them."
Bruce Robb wrote, "I have
been told by some employers that their insurance will be terminated if they were
to hire persons with certain types of disabling conditions."
Another person wrote, "I’m
in the process of buying a house with my partner. We applied for income
protection insurance and because of my epilepsy my premiums are twice as high as
Disabled persons bear the
brunt of an insurance market that often offers them an inferior or exorbitantly
priced policy compared to what nondisabled persons can buy. This, in turn, could
exclude them from a job because insurance often comes through one’s employment.
Any condition which makes one appear to be a risk to the insurance industry also
makes them a risk for the employer.
Over the last couple of
years, disabled persons have been challenging insurance underwriting practices
In February 2000, Howard
Chabner, a lawyer who uses a wheelchair, brought a case against United of Omaha
Life Insurance for charging him nearly double the standard life insurance
premium. Chabner asked the 9th U.S. Circuit Court of Appeals to rule that
charging a disabled man an arbitrarily high life insurance premium violates
federal and state laws on equal access to public accommodations under the
Americans with Disabilities Act (ADA).
The court found that
United "irrationally" discriminated against Chabner because it did not rely on
experience or data when determining the premium to charge him. If United were to
come up with sound actuarial data, theoretically it could charge Chabner more,
and this would not be irrational discrimination. It would be "rational"
discrimination based on the insurers’ need to make profits.
Now comes a lawsuit filed
by Californians for Disability Rights along similar lines. Attorneys filed suit
under the state’s "unfair business practices" violation code. They allege that
Bank of America advertises free life insurance of up to $1,000 to customers who
pass the bank’s "Good Health Statement." But to qualify, customers must verify
that they haven not been treated by a doctor in the last five years for a host
of conditions to be eligible for the plan.
The plaintiffs allege that
the insurance industry is falsely linking low life expectancies with those who
have certain disabilities. They rightly claim if one had polio as a child, that
does not equate with death at an early age. However this argument poses
problems since a number of disabled persons will still be excluded from
insurance protection by actuarial data.
Does everyone need life
insurance? Maybe not, but "rational" discrimination spills over into other vital
insurance markets like health care and can have dire life consequences.
Insurance corporations have found ways to eliminate segments of the disabled
population from the insurance pool by making terms unaffordable or insufficient
to meet one’s needs.
The 2nd U.S. Circuit Court
of Appeals has held that disabled persons are guaranteed equal access to
insurers’ goods and services. This bars underwriters from refusing entirely to
issue a policy to a disabled person, but does not prevent them from issuing
The ADA does not forbid
disability benefit plans that provide more generous coverage for physical
injuries than for mental disabilities, seven federal courts of appeals found.
Employers are free to exercise disparate treatment of mental and physical
conditions. Insurers could limit benefits and restrict coverage. They could also
cap policies and sell disabled persons a limited selection of a product.
Some courts merged these
findings into the general rule that the ADA regulates access to, but not the
content of, insurance policies.
It seems that insurance
litigation has led us to a stand-off. Those persons with disabilities that
provide no basis for "rational" discrimination could be treated on par with
nondisabled persons, but those whose impairments do generate higher risk will
just be out of luck.
The crux of the problem is
relying on the insurance market to produce a just outcome when insurance markets
exercise "rational" discrimination and exclude some disabled Americans from the
protections afforded others.
Today, thousands and
thousands of disabled persons have to fend for themselves in the workplace. They
do not have a fair shot at getting a job or adequate insurance. Such
unsatisfactory outcomes call for a universal guarantee to health care, one that
does not depend on degree of disability or ability to work.
Recent reports indicate
that health insurance premiums will likely "surge" at double-digit rates next
year for all insured persons. USA Today reports increased costs for prescription
drugs, hospital care and doctors will likely force health insurers to raise
premiums next year by13%, 20%, even 50%. Rising medical costs may force
employers and employees to "make tough and costly choices." This will most
likely translate into higher employee costs, more co-pays, and less coverage.
As adequate private
insurance becomes less available through employment, there is an opportunity
revive the largely forgotten principle of social justice in health care — now
absent in the bourgeois U.S. "rational" for profit system. We need to make sure
that disability issues are included in any radical analysis.
Marta Russell can be
reached at [email protected]