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Domestic Violence Victims and Insurance Companies

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Are Domestic Violence Victims also the Victims of the Insurance Companies?

Linda J. Noll
University of Dayton
Third Year Law Student

Domestic Violence is an issue that many women have faced in silence. It has only been within the last thirty years that the problem of domestic violence has been acknowledged. Finally, society has decided to take a stand against domestic violence with the creation of domestic violence advocates and domestic violence shelters to create a way out for many women. With this new awareness of the domestic violence issue, health care provides have recognized the signs and in some states are required to report suspicious injuries that are likely results of domestic violence.

This new awareness of the domestic violence problem has also created a new problem. This new problem stems from the insurance companies using the domestic violence as a condition in which it may restrict coverage, deny coverage, or increase the rates for the victims of domestic violence. From the health insurance companies’ perspective, the domestic violence victim has a potentially increased use of medical facilities because of the assaults from their abuser. The insurance companies view the increased use as the increased cost in providing for that individual which would be an increased cost to the consumer or a reduction in coverage as they do with many other conditions.

The insurance companies are in a business. This business is to take a calculated risk by providing payments for medical expenses as they arise in return for a monthly premium. The underlying policy is to charge rates in accordance with the risk involved, and ultimately to make a profitable investment. By using characteristics involved with domestic violence, the insurance companies are following their policies associated with the risk analysis of providing coverage to an individual.

Life insurance companies use a similar rationale for increased rates or denial of life insurance coverage. The assaults from the domestic violence abuser have an increased likelihood of resulting in death than someone who is not in an abusive relationship. This increased likelihood of death in comparison with others of similar characteristics increases the risk of premature payment of the policy. Another issue that has been raised as a concern for insurance policies is the potential of the abuser being the owner or beneficiary of the life insurance policy. However, state intestacy statutes provide protection for the victim’s estate by prohibiting the person who committed the wrongful termination of the victim’s life from inheriting from the victim.

Currently, forty-one states have enacted legislation with varying degrees of protection for victims of domestic violence from the discriminatory actions taken by insurance companies. Some state legislatures have enacting legislation that restricts the insurance companies’ abilities to use the classification of domestic violence as a restriction for coverage. However, the medical history of frequent visits to the emergency room may be used in determining the risks involved in insuring the individual. Other states have enacted stricter legislation that prohibits an insurance company from restricting coverage for any restriction stemming from the classification, use of medical history in which the company knew or should have known as incidents of domestic violence, or attempting to restrict coverage as a pre-existing condition for continued care in relation to past domestic violence assaults.

The following articles will assist in research concerning the current legislation of insurance companies in connection with limiting, denying, or increased rates stemming from domestic violence. Also, I have included a few general online sites for domestic violence which are updated periodically. These sights may be of further assistance by searching the updated material.

______________________________________________________

Lewis, Tamar. "Seeking a Public Health Solution for a Problem That Starts at Home"’ The New York Times; June 22, 1997, 19.

This newspaper article presents some background and statistical information concerning domestic violence. This information is necessary to understand the extent to which domestic violence has plagued our society. The shocking statistics are that nearly 30% of all homicides of women are committed by either the husband or boyfriend. The epidemic is costing approximately $857,300,000.00 per year in order to provide health coverage for the victims. When evaluating the approximate cost of health care coverage, the figure does not take into consideration all the other victims that did not seek the appropriate medical care needed.

________________________

Rebecca Brannan. INSURANCE: Unfair Trade Practices: Prohibit Discrimination Against Victims of Family Violence in Insurance Coverage, Rates, and Claims, 17 Georgia State University Law Review 220 (2000).

This is a ten-page article which examines the Georgia statute pertaining to the insurance companies abilities to use domestic violence as a discriminating factor in issuing insurance policies. The article articulates the magnitude of the problem that victims of domestic violence face through the examples of discrimination in health, life, property, and automobile insurance. One example that I found most appalling is about a Georgia woman who was denied reinstatement of homeowner’s and automobile insurance, because her husband cancelled them the day before the assault; and even though he was sentenced to twenty years in prison, the insurance company refused coverage because she was now classified as a high-risk.

The Georgia statute is comprehensive in its coverage protecting the domestic violence victims. This legislation does not limit the insurance company’s abilities to using a classification of being a domestic violence victim as the limiting factor. Instead, the legislators looked to all the potential loopholes that the insurance company may be able to limit coverage to a victim and has adequately protected the interest of the domestic violence victims. This statute is a model statute for other states to look for while drafting or changing their own legislation to protect the victims of domestic violence.

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Arizona Revised Statute § 20-448 (2000)

The statute provides that a life insurance company cannot limit, deny, refuse renewal of the policy, cancel, or charge different rates for life insurance for victims of domestic violence. However, an insurance company may restrict coverage when the perpetrator of domestic violence either owns or is the beneficiary of the life insurance policy on the victim’s life and the insurance company has reason to know or reasonable grounds to suspect the perpetrator of domestic violence has a record for domestic violence.

The criticism of this statute arises under the restriction that the known or reasonably suspected perpetrator of domestic violence cannot own the life insurance policy on the victim. Many of the cases of domestic violence are between spouses. This creates the potential of eliminating life insurance for the victim of domestic violence merely because the spouse owns the policy which may name children or other innocent parties as beneficiaries. If the statute limits the perpetrator from being the beneficiary, the victim and other innocent parties will be protected to a greater extent. There are already laws in existence which do not allow an individual’s murderer to benefit by way of inheritance from the victim’s death. By not allowing the victim to have life insurance merely because the perpetrator of domestic violence owns the policy does not protect the rights of the victim. The victim may be further protected by restricting the possible beneficiaries or by taking additional measures to invalidate an inheritance to the perpetrator through more restrictive terms of the life insurance policy.

__________________________________

California Insurance Code §676.9 (1998)

The statute provides that an insurance company cannot limit, deny, refuse renewal of the policy, cancel, or charge different rates pertaining to health insurance for victims of domestic violence. If the policy is denied, or altered for a legitimate reason, then the victim of domestic violence is irrelevant in denying or altering the policy. No insurance company employee may ask questions pertaining to being a victim of domestic violence.

The problem with this statute arises the health insurance company’s inability to raise rates of an individual who is a victim of domestic violence which is a higher risk than the initial evaluation. The insurance company may attempt to raise the individual’s rates for a facially legitimate reason with the underlying reason being the individual is a victim of domestic violence.

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Hellman, Deborah S. "Is Actuarially Fair Insurance Pricing Actually Fair?: A Case Study in Insuring Battered Women", 32 Harvard Civil Rights – Civil Liberties Law Review 355, Summer 1997.

This fifty-three page law review article focused on the fairness to victims of domestic violence in using actuary pricing for health insurance. The article studies the different theories in why using the domestic violence as a factor in the actuary pricing of health care for the victims. However, this article only briefly mentioned how this applies to the victims of domestic violence who leave the relationship, but are still considered victims for pricing purposes or are still undergoing treatment for a condition that arises from the past domestic violence assaults.

One example used was comparing a victim of domestic violence to a person with diabetes, and it further explored the matter as one of which the burden involved for maintaining control over the situation. Throughout the article, the author explored the possible reasons that the critics to the insurance company’s use of domestic violence as a factor feel that the victims should be protected. Included in the possible reasons are the victim is not accountable due to the degree of burden involved with leaving an intimate relationship, society’s failure to protect the victim from the crime or by allowing the problem to grow because of the unawareness of the problem. I agree that the reasons given are possible. However, I believe many people have a knee-jerk reaction to hearing that an insurance company would enact such policies upon individuals who are already being abused and that much of the legislation is a reaction a sense of injustice.

The author analyzed the different states’ legislation governing health insurance for the victims of domestic violence. One area that I found interesting was that the state legislation governing health insurance does not apply to employers who are self-insured due to ERISA.

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Sheri A. Mullikin, A Cost Analysis Approach to Determining the Reasonableness of Using Domestic Violence as an Insurance Classification, 25 Journal of Legislation 195 (1999).

This thirty-two page article examines the cost analysis of insurance companies using domestic violence as a factor in determining rates for domestic violence victim.

As noted in the article, insurance companies prefer the theory of a "fair discrimination." With this, the insurance company does not arbitrarily choose a group to discriminate against while determining rates. Instead, the insurance company discriminates against all groups who will be responsible for additional risks. The theory the insurance companies use to determine rates is a cost analysis in which the risk of providing resources has been calculated so that the company will be able to profit from taking the risk.

The cost-benefit analysis is appropriate for determining insurance rates in most circumstances. However, many of the arguments against the cost-benefit analysis stems from a knee-jerk reaction to allowing the insurance company to discriminate against the victim because they are already classified in a protected class of individual under other state laws which prohibit domestic violence assaults. In order to further protect the victims of domestic violence without jeopardizing profits, the insurance companies should be able to calculate the additional risk of providing insurance for victims of domestic violence and perhaps spread the cost across the board.

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State-by-State Report Cards on Health Care Laws and Domestic Violence http://www.fvpf.org/statereport/states-all.html (Last visited on April 26, 2001).

This site provides a breakdown of each state concerning the current status of legislation governing domestic violence issues. Included in the listed material are the domestic violence insurance discrimination legislation and domestic violence reporting legislation. This comprehensive list quickly allows the individual to find if their state has legislation governing the domestic violence issues and provides the legislation without having to spend additional time to locate the legislation.

_________________________

Janlori Goldman, JD, R. M. Hudson, MA, JD, Z. Hudson, et. All. Health Privacy Principles for Protecting Victims of Domestic Violence, http://www.fvpf.org/health/privacy-principles.html (2000).

This article demonstrates the way in which insurance companies were able to attain and use the domestic violence from a person’s medical records. It also explains some concerns that victims of domestic violence have when the abuser provides their insurance and the victim have left the situation. In many instances, the need for medical attention for the victim or children after leaving will go untreated or they will not use the health insurance they have because of the fear that the abuser may find them and begin the cycle again.

One area of concern for victims of domestic violence is medical documentation of the abuse. The article explains the importance of documenting the abuse as being an intricate part of treatment which includes being able to diagnose and understand the patients conditions as a part of the abuse. However, the insurance companies have access to the patient’s medical records. Without the legislation specifically protecting the insured victim, the doctor-patient communication may be harmed in order to protect the insurance.


 

General Online Resources

http://www.nowldef.org/html/policy/introtf.htm – NOW Legal Defense and Education Fund – Violence Against Women – A searchable web site for up to date issues concerning domestic violence.

http://www.fvpf.org - The Family Violence Prevention Fund – a searchable web site dedicated to the prevention and education of domestic violence.

 

 
Related Pages:
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Professor Vernellia R. Randall
Institute on Race, Health Care and the Law
The University of Dayton School of Law
300 College Park 
Dayton, OH 45469-2772
Email: randall@udayton.edu

 

Last Updated:
 03/10/2010

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