July 15, 2020…

Insurance companies cannot discriminate against disabled people by broadly denying coverage for the types of treatment they need, a federal appeals court ruled Tuesday.

In a lawsuit against Kaiser Foundation Health Plan by two hard-of-hearing patients insured under the federal health care law, the Ninth U.S. Circuit Court of Appeals in San Francisco said they may not be entitled to coverage, because not everyone with a hearing loss is disabled. But the court said Kaiser and other insurers that provide coverage under the 2010 law known as the Affordable Care Act may not design their plans in ways that exclude the disabled.

The law "attempts to provide adequate health care to as many individuals as possible by requiring insurers to provide essential health benefits," Judge Jacqueline Nguyen said in the 3-0 ruling. "And it imposes an affirmative obligation not to discriminate in the provision of health care - in particular, to consider the needs of disabled people."

It was the first such ruling by a federal appeals court, said Eleanor Hamburger, a lawyer for the two Washington state residents who filed the suit.

"It has broad impact on people with disabilities. Obesity, hearing loss, vision treatments, all of those are implicated by this decision," Hamburger said. She said her clients, both of whom suffer severe hearing loss, can revise and refile their suit to implicate Kaiser in disability discrimination.

Lawyers for Kaiser were not immediately available for comment.

The Affordable Care Act provides insurance coverage, with federal subsidies, for most Americans not already covered through their employers. Kaiser's policies under the ACA provide coverage for cochlear implants, electronic devices inserted behind the ear, but not for other types of hearing aids or visits to medical specialists.

The Washington plaintiffs say they need such care, and the court said both of them qualify as disabled. But Kaiser's lawyers argued that the 2010 law left it up to each state to determine the "essential" benefits that must be covered.

The court said it was "possible that Kaiser has a reasonable, nondiscriminatory reason for its blanket exclusion of treatment for hearing loss other than cochlear implants," an issue the company can present to a federal judge.

But Nguyen said the Affordable Care Act explicitly forbids insurers to "make coverage decisions ... or design benefits in ways that discriminate against individuals because of their ... disability."

A patient would have to prove intentional discrimination in order to win financial damages, Nguyen said. But she said a suit seeking coverage would require proof only that the denial has a discriminatory impact on the disabled.

Hamburger said the ruling differed from a June 2019 decision by the Sixth U.S. Circuit Court of Appeals in Cincinnati, which said federal law allowed insurers to deny coverage to the disabled as long as there was no intentional discrimination. That ruling was not appealed.

After Tuesday's ruling, attorney Daniel Sternberg of Consumer Watchdog in Los Angeles, which represented HIV/AIDS patients unsuccessfully seeking coverage in last year's case, said, "Unlike the Sixth Circuit, the Ninth Circuit has embraced what the Supreme Court acknowledged 35 years ago - that discrimination can be unintentional but nonetheless threaten the health of individuals with disabilities."