By Michael Pernick
12 May

CHD and the Law: Pre-Existing Conditions

Monday, May 12, 2014

This blog series features stories involving congenital heart disease and the law. The blog posts may discuss contemporary or historical court decisions, laws or regulations, or other legal issues that relate to CHD. These posts are purely for entertainment and educational purposes and are not legal advice. Any opinions expressed in this series of posts are solely those of the author and do not represent the Adult Congenital Heart Association.

Jessica Rice was born in March of 1987, and her story began the same way as it does for many in the congenital heart disease community, including me: Soon after birth, she started turning blue. The doctors did an echocardiogram and based on their initial testing they diagnosed Jessica with pulmonary hypertension, but did not discover her congenital heart defect.

Jessica’s parents did not have health insurance when Jessica was born. They incurred substantial hospital bills following Jessica’s birth, due to the complications. One month after she was born, after resolving the unexpected medical bills for all the testing, they decided to buy insurance with Western Fidelity.

Their policy was issued in March. In July of that year, Jessica appeared to have trouble breathing, and the doctors began to do some additional tests. This time, they discovered a congenital heart defect—a large atrial septal defect (a hole between the left and right atria). Jessica went into surgery right away, and thankfully the surgery was successful with no complications.

When the bills from the surgery started to arrive, her parents were glad they decided to buy insurance. They submitted their claim to Western Fidelity, but much to their surprise, the insurance company refused to pay. Western Fidelity claimed that they wouldn’t have covered Jessica had they known she had a congenital heart defect and they revoked her policy. The Rice family had to pay for the surgery themselves, but they couldn’t afford it, so they sued. And their lawsuit was thrown out of court.

The Rices paid their insurance bills dutifully, and expected the insurance to cover their expenses. But the insurance abandoned them after the surgery. The court found this to be legal.

The Rices had no idea that their child had a congenital heart defect when they signed up for the policy, but that didn't matter to Western Fidelity—they dropped Jessica for a pre-existing condition that nobody knew about. The court found this to be legal.

The Rices shared all of the tests and medical reports with Western Fidelity when they applied for insurance. Western Fidelity approved their application. But when the heart defect was discovered, they were dropped. And this was legal too.

These problems were not unique to the Rice family. Until recently, most insurance policies had clauses limiting coverage for pre-existing conditions, and these clauses were particularly harmful to children and adults with congenital heart disease. The injustice of these provisions was profound—those who were in most desperate need of medical attention were denied coverage at the moments in their life when quality healthcare was most imperative.

All of this changed in 2010 when the Affordable Care Act was passed into law and signed by the President. Soon after the Act was signed into law, insurance companies began to voluntarily drop provisions that denied coverage to individuals based on pre-existing conditions. On January 1, 2014, the law went into full effect, and it became unlawful for insurance companies to deny coverage to anyone—including children and adults with congenital heart defects—based on their condition. Today, children like Jessica would get the care they need, and all insurance companies are required to provide coverage.

The names of the people involved in this case have been changed. The facts discussed in this case came from Western Fidelity Insurance Company, 872 F.2d 665 (5th Cir. 1989).


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