Newspaper Page Text
NEWS
PWA Sues Storehouse Over AIDS Cap
Are Health Benefits Only for the Healthy?
by Beverly Gaucher
As lawyers prepare to fight one of the country’s most
difficult ethical and financial battles of this decade, 36-
year-old Richard Owens fights for his life with minimal
medical care.
Owens, an employee of Storehouse, Inc., has AIDS.
In October he was unable to undergo a critical pancreas
operation because Storehouse's health-benefits plan
changed its policy from one with a maximum cap of one
million dollars for all illnesses to one with a cap of
$25,000 for employees suffering with AIDS and AIDS-
related illnesses. Storehouse claims potential financial
ruin if it has to pay for the medical treatment of Richard
Owens, not to mention three other AIDS-afflicted
employees under the Storehouse health-benefits plan.
Owens had worked for Storehouse for three years
when he was diagnosed as having AIDS in 1988. From
1988 to March of 1990, the furniture and accessory
retailer's plan paid out $250,000 of its original one mil
lion dollar limit for Owen's health care.
According to the Employee Retirement Income
Security Act (ERISA), a self-insured policy, such
Storehouse's, can be modified so as to deny benefits dur
ing a treatment regimen. (Only self-insured programs
may do this: traditional health plans administered by
insurance companies cannot legally modify a plan during
treatment.)
In March of 1990, the Storehouse modified its
employee health coverage to carry a maximum cap of
$25,000 for AIDS and AIDS-related illnesses in an
attempt (according to Storehouse) to avoid financially
destroying its entire employee health-benefits plan. At
the time this article was written, all Storehouse financial
information was under seal. Despite that change the
company has, since March, paid Owens an additional
$90,000 for medical care "out of good faith," it claims.
Owens' suit states that the retroactive change in the
company's insurance plan violated the anti-discrimination
provision of ERISA. His attorney, Chip Rowan, will take
the case to the 11th U.S. Circuit Court of Appeals within
the next few weeks.
While awaiting that trail, Rowan had requested a
temporary restraining order from the Court. Rowan made
the move in an attempt to force Storehouse to continue
payments for Owen's medical care under its health-bene
fits plan.
U.S. District Court Judge Owen Forrester denied his
request. Forrester found that only a future trial could
determine who is responsible for Owen's medical bills.
Thus, he reasoned, it would be unfair to require the
Storehouse health-benefits plan to continue paying bills
for which they might not be responsible, and for which
they possibly could never recover. Meanwhile Owens'
health continues to deteriorate, with minimal medical
care—substantially less than he'd been previously receiv
ing, anyway.
Is a health-benefits plan responsible for the claims
of those it had previously agreed to insure even if those
claims could potentially destroy the company financially
Susan McCartey/Fulton County Daily Report
and thereby render the company unable to cover the med
ical expenses of all others who have paid into their plan?
Storehouse says no. Rowan thinks otherwise. And
Rowan and his client are also willing to contest whether
Storehouse would actually be financially destroyed if the
company followed through on its original health-benefits
plan.
Rowan shudders at the potential precedents being set.
If Storehouse wins this suit, self-insured policies will be
able to pick which diseases, illnesses, disaoilities, etc.
that they do not want to cover depending on how much
the company is willing to spend. The amount the individ
ual was guaranteed at beginning of the coverage, the
amount of medical treatment needed, and the amount she
or he has paid into the plan will be rendered irrelevant.
Also, if Storehouse wins the suit, many in need of
medical attention will be forced to use the country's
already overloaded and underfunded public assistance
programs.
If Owens wins the suit, then self-insured policies
would need to increase premiums for everybody and/or
cover a smaller percentage of medical costs per case than
are currently covered.
Owens v. Storehouse is not the first time self
insured health-benefits plans have challenged AIDS
patients' claims here in Georgia. This year, both Galaxy
Carpets, Inc. of Dalton and the Peasant Corporation of
Atlanta attempted to apply caps for AIDS claims to their
self-insured policies. In both cases ACT UP used a com
bination of negotiations and political pressure to get the
caps removed.
Only one other suit similar to Owens v. Storehouse
has been filed in the U.S. In McGann v. H&H Music,
H&H Music put a $5,000 cap on its treatment of AIDS
related disease six months after an employee, McGann,
was diagnosed with AIDS. Last June in a summary judg
ment, a U.S. District Judge ruled that an employee under
a self-insured policy was not subject to a policy that
never changed and, as well, the particular policy at hand
had not violated the anti-discrimination provision of
ERISA. McGann is awaiting an appeal before the 5th
Circuit Court.
Dear
Friends,
Sticks and
stones may
break our
bones, but
words can
hurt like
hell too!!
Whether it's a physical attack against you, or
words hurled like a stone from a passing car,
report Hate Crimes by calling 286-BIAS. The
information you give counts because you count.
Let's make it stick.
GET ~mcB HENCE
BRING IN THIS AD TO GET
YOUR NEXT PURCHASE AT
Shakespeare
& Company
Greeting Cards • Gifts • Books
122 North Avondale Road • Avondale Estates, GA 30002
296-4088 (more parking in rear)
Store Hours: Mon-Sat, 10-7; Sun, 1-7 j
Southern Voice/November 22, 1990
5