Unum Pre-existing Condition Exclusion Does Not Apply To Disability Claim

The Supreme Court is hearing oral arguments on the Patient Protection and Affordable Care Act (commonly known as “Obamacare”) this week, and one of the tenets of the act contains new standards governing the application of pre-existing condition exclusions in insurance policies (see See Report of Congressional Research Service). Against the backdrop of the current legal debate in Washington, the Middle District of Pennsylvania in Lafferty v. Unum Life Ins. Co. of Am. recently addressed the meaning of a pre-existing condition in an insurance contract, and the extent to which an insurance company could apply such a limitation against its insured.

Mr. Lafferty became disabled due to congestive heart failure. He applied for disability benefits to Unum, who denied the claim on the basis that Mr. Lafferty had a pre-existing condition for which he had treatment during the three month look back period in the policy. Mr. Lafferty had a long-standing heart condition and was taking medication (aspirin) as a preventative measure against further cardiac events.

The pre-existing provision in the policy excluded medical conditions for which the insured “received medical treatment, consultation, care or services including diagnostic measures, or took prescribed drugs or medicines” three months before the policy’s effective date. Unum argued that, since hypertension, hypercholesterolemia, and coronary artery disease could lead to congestive heart failure and the need for a pacemaker, Lafferty’s congestive heart failure was a pre-existing condition.

The court disagreed, emphasizing that the plaintiff’s disabling condition was new. The Court found that the preventative care constituted “taking steps to prevent a disorder,” as opposed to having the disabling medical condition. The Court relied in part on McLeod v. Hartford Life and Accident Ins. Co., which cautioned that “considering treatment for symptoms of a not-yet-diagnosed condition as equivalent to treatment of the underlying condition ultimately diagnosed might open the door for insurance companies to deny coverage for any condition the symptoms of which were treated during the exclusionary period. To permit such a backward-looking reinterpretation of symptoms to support claims denials would so greatly expand the definition of preexisting condition as to make that term meaningless: any prior symptom not inconsistent with the ultimate diagnosis would provide a basis for denial.”

In our opinion, the Court correctly limited the application of the pre-existing clause of the policy because taking preventative care is very different from caring for a medical condition that already exists. We at Bonny G. Rafel are experienced in interpreting insurance contracts, and will fight to maximize your rights under your disability policy.

– By Sara E. Kaplan, Esq.