March 17, 2010

Insurance Company Allegedly Targeted HIV-Positive People and Dropped Coverage

Last September, the South Carolina Supreme Court upheld a verdict against the Fortis Insurance company for revoking South Carolinian Jerome Mitchell health coverage after he tested HIV positive. The case, Reuters reports, has helped expose a Fortis—now Assurant Health—policy of targeting policyholders living with HIV and dropping their coverage.

According to the article, previously undisclosed records from Mitchell’s case reveal that a computer program and algorithm tagged policyholders recently diagnosed with HIV for an automatic fraud investigation, and the company allegedly dropped coverage once it discovered any pretext to revoke the policies.

While insurance providers have often investigated policyholders shortly after they’ve been diagnosed with life-threatening illnesses, government regulators and investigators say singling out HIV-positive people is unprecedented.

An unnamed federal investigator told Reuters that the reason behind singling out HIV-positive people is relatively high cost of care.

“We are talking a lifetime of therapy, a lifetime of care…a lot of bills. Nowadays someone with HIV can live a normal life for decades. This was about money.”

In Mitchell’s case, the company dropped coverage because a nurse wrote down the wrong year of his HIV test. While Mitchell tested positive in 2002, the nurse erroneously wrote his diagnosis year as 2001—at one day before his application for insurance. After Fortis revoked his policy, Mitchell hired an attorney to help correct the problem and have his policy reinstated. The company reportedly ignored the attorney’s letters, prompting Mitchell to sue the company for $15 million. Last fall, the South Carolina Supreme Court ruled that Assurant Health must pay Mitchell $10 million in damages.

While the company has said it does not comment on individual customer claims, it issued a statement on Mitchell’s case:

“We disagree with certain of the court’s characterizations of Assurant Health’s policies and procedures in the Mitchell case,” Assurant Health said in a statement. “The case continues to progress through the appellate process.”

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Previous Comments:

Paul, , 2010-03-23 14:38:01
When my insurance picked up several years ago, they had a 2 year prexisting condition time period in place. I didn't report my anonymous, positive test until the 2 year limit was up. I hope this judgement holds up and bankrupts the company.

Mike, Atlanta, 2010-03-20 16:07:18
This insurance compay deserves this judgement and it should be a warning to all other insurance companies. Hopefully the moderate democrat lawmakers will get on with reform right f'ng now.

Rosetta, Buffalo, NY, 2010-03-19 08:46:58
Ya just gotta love witnesssing JUSTICE!

Brian J. Kratzer, Fort Wayne, 2010-03-18 20:08:53
Geez...Assurant huh? Does anyone else remember them getting into trouble last year for denying a wheelchair for a young child that had their 'coverage'? It made national news also. It's all about the dollars. I started working for a (insurance brokerage) company and they have a whole list of disqualifiers for people with pre-existing and newlydiagnosed etc.. Unfortunately, I don't have any of that information anymore but it would be worth checking into before taking any policy with them.

Brian, Houston, TX, 2010-03-18 17:34:14
I hope the guy takes the insurance company to the bank. The insurance companies behavior is horrible. Sadly, it may be cheaper for them to keep it tied up in court for years rather than pay.

James, St.Paul, 2010-03-18 13:35:52
Oh big surprise. Anyone with brains knows HIV poz patients get discriminated against all the time.

Ken Shropshire, Nashville,TN, 2010-03-18 12:57:56
Great verdict!!!!I had the same experience when I converted to Positive status.My insurance company tried to claim I had a preeexisting condition though I had 2 negative tests after the policy was issued .Luckily the insurer backed down .My 2 treating doctors stated "insurers do that all the time". Maybe some of these damn Republican lawmakers will be so fortunate when they or their family members get sick!!!!Right on to the plantiff in this case!!!!!Let's the case gets lots of media attention!