What’s Who You Love Got to Do with It? Allegations of Sexual-Orientation Discrimination in the Context of Insurance Underwriting—Part 2

The issue of HIV prevention, an issue that is seen by many to affect the LGBTQ community disproportionately, more specifically gay men, has found its way into the discussion of civil liberties in the context of insurance by way of the Massachusetts lawsuit regarding PrEP that was the subject of a recent blog post. As a backdrop to any discussion of HIV and insurance, a retrospective on the effect of HIV/AIDS on the insurance industry and the industry’s actions to deal with the onset of the epidemic should be considered.

HIV/AIDS Epidemic:  How did Insurers Respond?

In the 1980s, as HIV/AIDS spread without a cure, what since has been described as “AIDS panic” arose and was mostly directed toward the LGBTQ community because many of the early victims of AIDS were gay men. In fact, AIDS was dubbed the “Gay-related immune deficiency” (GRID) in a 1982 New York Times article; while the term did not take root in scientific literature, the association of the LGBTQ community with the “Gay plague” persisted.

Faced with a new and rapidly growing epidemic, some health insurers feared that their solvency was at risk because of the costs associated with the healthcare for covered AIDS patients (see Judith Berman’s AIDS Antibody Testing and Health Insurance Underwriting: A Paradigmatic Inquiry, 49 Ohio St. L. J. 49 (1989)). In-depth actuarial analyses done at that time indicated that enhanced underwriting could play a vital role in mitigating the risk of the epidemic to life and health carriers (see The Impact of AIDS on Life and Health Insurance Companies: A Guide for Practicing Actuaries, Transactions of Society of Actuaries 1988 Vol. 40. pt. 2). Therefore, as a means of addressing the specter of out-of-control costs, collapsing blocks of business, and future insolvency, many life and health insurers began crafting exclusions to be included in their policies for AIDS and AIDS-based coverage. Some of the same carriers also began using HIV testing as a means of determining insurability (see Karen A. Clifford and Russel P. Iuculano’s AIDS and Insurance: The Rationale for AIDS-Related Testing, 100 Harv. L. Rev. 1806 (1987)).

Seemingly rejecting the assertions by insurers that the exclusions and testing were necessary to allow them to underwrite and price the insurance policies so as to remain financially viable, some states began enacting legislation or enforcing already-existing regulations in such a way as to preclude some of the insurers’ actions. Ultimately some of the restrictions on the insurers that had been enacted were later repealed. The result was a patchwork of ever-changing rules and regulations that were prohibitive to both insurers and HIV/AIDS patients.

As medical research provided a growing understanding of the disease, and as treatment protocols improved, meaning that HIV was no longer an automatic death sentence, the “AIDS panic” began to subside. Likewise, concerns over health insurer insolvency because of HIV/AIDS also faded from discussion, and most group health insurance policies began to provide coverage for HIV treatment that was designed to prevent the onset of full-blown AIDS. But even with the passage of decades, up to the time that the ACA became law in 2010, some HIV-infected persons still faced limited access to health coverage because HIV may have been considered a preexisting condition or because private, individual insurance was cost prohibitive.

HIV/AIDS Response: Did it Sow Seeds of Distrust?

Looking back to the worst days of the AIDS crisis in America, two distinct points of view can be seen. From the insurers’ perspective, many companies feared that HIV/AIDS would affect their ability to price, underwrite and issue policies properly, and accordingly, this would affect their viability. Insurers steadfastly maintained that their decisions related to HIV/AIDS were warranted, were not targeted at just gay men, and were no different than their consideration of any other health condition or disease. As a counterbalance to the insurers’ view, some in the LGBTQ community held the belief that the insurers’ response to the AIDS crisis was further indicia that insurers had a bias against gay men. This belief may have been fueled by the notion, based on anecdotal accounts, that even before the epidemic, single men of a certain age who lived in certain locations or who worked in stereotypically “gay” careers had routinely been denied insurance based on suspected homosexuality. This festering distrust may have played a role in the animosity against insurers that evolved because of what was seen as a discriminatory response to the epidemic. These countervailing perceptions—customary business practices versus perceived discrimination—form an interesting backdrop for litigation today regarding the HIV-prevention protocol and how it relates to the issuance of certain types of insurance policies.

We will continue to update this blog with developments in the Massachusetts lawsuit and with additional discussion on the issues brought up by the allegations in the case.