Saturday, February 4, 2017

Ensuring Insurance

In re J.H., 2016 VT 122

By Elizabeth Kruska

Here’s a case about the Affordable Care Act.

J.H. is a young woman who married a young man. As a kid, J.H. got health coverage under Dr. Dynasaur. That coverage was supposed to end when she turned eighteen, but because of an administrative error it continued for a couple years. When she reapplied for insurance when she was about 21 (I think), she put on her application for state health insurance that she was recently married. Between she and her husband, they had a household income of about $36,000, and he had a health insurance plan available through his job. This was all disclosed on her application. The State said she didn’t qualify because of her husband’s insurance.

J.H. could only enroll in her husband’s job’s plan if he also enrolled in the plan. Husband didn’t enroll in the plan for a very good reason. He had grown up in foster care (at least in his teens) and was never adopted before he “aged out”—meaning, turned eighteen while still in State custody. Because of this, under a different rule, he’s entitled to significant Medicaid coverage until he’s 26. Also, because of this status, he’s entitled to Medicaid coverage regardless of his household income. He could be a billionaire and still be allowed to get Medicaid coverage because he was an unadopted foster child. Why on earth would he pay for insurance coverage through his job if he gets Medicaid because of his situation? I can think of several very good reasons very quickly why he wouldn’t.

Bring J.H. into the equation. Because Husband didn’t enroll in his work plan, she couldn’t also get health coverage under his plan. But the State wouldn’t allow her coverage under the State’s plan because there was health insurance “available” to her under her husband’s plan at work.

Health care coverage, on the state level, is administered by the Economic Services Division (ESD) of the Department for Children and Families (DCF). ESD determined that J.H. wasn’t eligible for health insurance through Vermont Health Connect. J.H. appealed to the Human Services Board (HSB), who reversed. The State appealed that, and SCOV affirms. That means J.H. is allowed to get insurance through the State.

The HSB looked at the rules at play and determined that even though Husband had insurance available through his work, it would be superfluous to make him enroll in that plan when a different rule allowed him different coverage. Since it would not make sense for him to have two health insurance plans, and it would not make sense for him to give up the benefit he receives as a former foster child, he doesn’t have to ditch Medicaid in favor of private insurance. And since the work-related policy requires him to be enrolled for his wife to be enrolled, there is no way she can get that private insurance without him. HSB ruled that she should be eligible for subsidized insurance.

The State, on appeal, argues that because Husband could have enrolled in his work insurance, that J.H. is not eligible for subsidized insurance. The State essentially argues that the rule is meant to route people into private insurance first, and if there isn’t private insurance available, then eligibility for subsidized insurance can be determined. They don’t argue that Husband has to ditch his Medicaid; they argue that because there is insurance available through Husband’s job that he essentially controls the household’s private insurance opportunities. It would be up to the family to decide what to do, but the fact of the option means J.H. can’t get subsidized insurance.

The State also argues that the policy behind the Affordable Care Act is to strengthen the private, employer-based insurance system.

Legal Aid gets involved with an amicus brief on behalf of J.H. and supports J.H.’s position that she should get subsidized insurance. They use what seems like a common-sense argument. J.H. is stuck. She doesn’t have the option for her own private insurance, and since it’s really up to Husband to decide if he gets work-related insurance or not, if he chooses not to enroll in his work plan, she effectively goes uninsured.

SCOV reviews questions of federal law de novo. If it was an agency rule, the review would be more lenient, since SCOV gives deference to agencies. But an agency dealing with federal law and rules gets closer scrutiny.

They look at the plain meaning of the statute, and determine it works in favor of the HSB’s ruling. They look at the rule involved in the health care-related tax credits and subsidies. SCOV determines that the rule, in fact, does not compel Husband to enroll in his work’s plan. It also treats the employee and related family members separately, and in no way imputes the employee’s decision to enroll in a plan (or not) to family members.

SCOV also points out that spouses aren’t property. J.H. and Husband are two different people. Husband does not control her. She’s free to engage in whatever contractual agreements she wants, and vice versa. It would be unfair for her essentially to force him in to giving up a significant benefit just so she could also have health insurance.

SCOV closes by taking a different view of the policy behind the Affordable Care Act. They read and understand it to have the purpose of getting as many Americans as possible covered by health insurance, not, as the State urges, to bolster the employer-based health insurance system. By reading the federal regulation expansively, and by here allowing J.H. to get subsidized insurance, SCOV is comfortable that its decision is consistent with the goal of the ACA.

1 comment:

  1. There are essentially three categories of insurance lawyer.

    The first is the business side which deals with regulations and compliance and licensing and the business of insurance. It is an office job and can be either an outside counsel position or a staff position employed by the carrier itself.

    The second category is a coverage attorney. When a person makes a claim the carrier decides whether the loss is covered by the policy. Oft times the carrier seeks a legal opinion. The coverage lawyer writes loooong reports quoting policy language, citing the facts and discussing in excruciating detail whether the facts bring the claim under the policy.

    Sometimes there is coverage litigation. The World Trade Center’s insurance coverage was a big one. Because the details of the policies had not been worked out before the planes hit, the question was whether the WTC suffered one loss or two, meaning whether the carrier paid once or twice.

    Third are the claims attorneys. When you make a claim and there is a dispute that leads to a lawsuit, the insurance company assigns counsel. Sometimes it is an employee of the insurance company, sometime it is outside counsel. We are the ones who take the depositions, go to court and try the cases. As John Williams correctly notes, claims counsel bill at a lower hourly rate than the business or coverage people, but we have all the fun. And of course i can give you guys the contacts of a good lawyer.