HIV-Preventative Medication and Insurance Underwriting—Regulators Weigh In

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HIV-Preventative Medication and Insurance Underwriting—Regulators Weigh InA gay man is suing Mutual of Omaha in Massachusetts federal court alleging that Mutual unlawfully denied him long-term care insurance because he was taking the HIV-preventative medication Truvada as PrEP. While that lawsuit may challenge the bounds of both insurance and Massachusetts public accommodation laws, it is not the only arena in which disputes related to insurance coverage and PrEP are currently playing out.

State Regulators Weight In

As more gay men come forward with allegations that they have been denied insurance because they take Truvada as PrEP, state insurance regulators have taken notice. The account of Dr. Phillip Cheng, as reported by the New York Times, drew nationwide publicity. Cheng was taking Truvada as PrEP when he applied for a lifetime disability policy. Initially, he was denied lifetime coverage and offered only a five-year policy because of his Truvada usage. After Cheng discontinued taking the drug, he applied with another company and was given the lifetime coverage. The reporting on the seemingly disparate treatment Cheng received–when he was taking Truvada versus when he was not–only served to intensify the debate over insurance practices regarding individuals on PrEP. In response, the New York Department of Financial Services opened an investigation. Superintendent Maria Vullo issued a statement on February 14, 2018, acknowledging reports of persons taking HIV-prevention drugs receiving alleged disparate treatment. She noted the reports raised “serious concerns” for the department because insurers cannot deny coverage based on discriminatory reasons. Vullo stated there is no legal justification for denying or limiting life, disability or long-term care insurance coverage simply because an individual takes PrEP, and she said to do so would be “tantamount to penalizing applicants based on sexual orientation” (N.Y.D.F.S. Statement, Feb. 14, 2018). The department issued a full Insurance Circular Letter on June 22 noting that under New York laws insurers may not “unfairly discriminate in their underwriting or rate setting based on an applicant’s use of HIV prevention strategies, such as PrEP” (N.Y.D.F.S. Circular No. 8, June 2018). While the circular did not state that no consideration could be made of PrEP in underwriting, it did make clear that where HIV prevention strategies, such as PrEP, are at issue, any consideration by the insurer must be based on sound underwriting and actuarial principals reasonably related to actual or anticipated experience.

Following the lead of Superintendent Vullo, on February 15, 2018, California Insurance Commissioner Dave Jones opened a similar investigation and encouraged Californians to report suspected discrimination. Whether other states will join New York and California and whether more litigation or regulatory action will ensue remains unclear. Certainly while the issue of alleged discrimination based on sexual orientation in the context of denials of insurance coverage for PrEP users may have started with Doe’s case against Mutual in Massachusetts, it is not likely to end there.

The Future

There is no clear answer as to whether carriers treat PrEP usage uniformly when deciding to issue or not to issue insurance policies. Media outlets have reported several insurance companies stating on the record that they do not decline coverage based on PrEP alone. But for any carrier that does deny coverage based on PrEP, advocates are poised to fight that carrier’s business decision; the advocates assert that the fight is about more than insurance coverage because Truvada is a drug meant to prevent a horrific, public health condition that has already taken a substantial toll on the gay community.

To date, notwithstanding that the current PrEP case is being fought in only one state, practitioners in states with statutes comparable to Massachusetts’ Public Accommodation Law—California, Colorado, Connecticut, Delaware, New York and others—should keep a keen eye on the outcome of the Massachusetts litigation; it is reasonable to conclude that the progression of the Massachusetts case may open the gate for similar cases in other jurisdictions. Of course, plaintiffs in future cases may not limit their actions to just public accommodation and may instead seek redress under state insurance statues or regulations, unfair trade practices acts, or common law claims.

As with any new or developing medical condition, procedure, or drug, insurers must adapt to make certain that their underwriting decisions regarding PrEP are based on the latest data and science and that any denial of coverage is rooted in solid underwriting principles. The importance of this becomes even more acute when allegations of systemic discrimination are being levied. Diligence is imperative because unfortunately even the appearance of wrongdoing can sometimes be more damning than the wrong itself.