“Pre-existing condition” is a term often heard in the current debate over the various Congressional insurance reform bills, but just how the term is used to deny health insurance coverage became apparent once again in a case decided earlier this month by the South Carolina Supreme Court.

The Congressional bills would would do away with pre-existing condition exclusions.

In the case, an insurance company – Fortis Insurance – relied on a mistaken date written down by doctor’s office staffer to deny coverage to a young man living with HIV.

The South Carolina court unanimously awarded $10 million in punitive damages and $150,000 in actual damages to Jerome Mitchell, Jr. whose coverage was retroactively rescinded by his health insurer after he filed his first HIV-related claim, Gay City News reports. The court called the insurance company’s behavior “reprehensible” in the case.

Court – Insurance company ‘reprehensible’ in denying coverage to HIV-poz man [contd.]

Law professor Arthur S. Leonard summarizes the case for Gay City News:

Jerome Mitchell, Jr., was a 17-year-old heading off to college and no longer covered by his mother’s policy on May 15, 2001, when he applied to the Fortis Insurance Company for an individual health insurance policy. He truthfully completed the application form, indicating that he had never been treated for or diagnosed as having any “immune deficiency disorder,” and his application was approved.

In April 2002, Mitchell participated in a Red Cross blood drive, and on May 13 received word that his blood donation had tested HIV-positive. Red Cross advised him to have his own doctor confirm the result. On May 14, Mitchell tested positive again at his doctor’s office.

The doctor’s assistant wrote a note attached to his chart: “Gave blood in March –– got letter yesterday stating blood tested HIV.” This note correctly identified Mitchell as 18 years old, but mistakenly recorded the date of the appointment as May 14, 2001, rather than 2002.

The court found that Fortis “was deliberately indifferent to its contractual obligations and to Mitchell’s health and well being” when it ignored contrary evidence and cancelled Mitchell’s policy only because of the incorrect date written on the doctor’s office form. The insurance company relied on that mistaken date when it argued that Mitchell’s HIV status was a pre-existing condition.

Mitchell was able to get treatment from a free clinic, but the only way he could get coverage restored was to have Fortis do it, since any other company would disqualify him based on his pre-existing condition.

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