R.I. Lawmakers Close An Insurance Loophole
Sometimes, there’s nothing like a rippin’-mad citizen to make government do the right thing.
Consider, for example, Dr. Douglas Blake. He was standing behind Governor Chafee at the State House Tuesday afternoon as the governor signed a bill into law that closed a sneaky little loophole through which insurance companies have been scampering for years.
And it was Blake — who had been a victim of the loophole — who added the victim’s voice to the debate.
“It’s somewhat of a Rhode Island surprise when the right legislation is passed,” he said.
But it was passed, on the second try. And people in the State Room were saying it was the right thing to do.
It was that for sure. Before Chafee signed the bill, insurance companies in Rhode Island enjoyed ridiculous authority to deny coverage with little or no justification. Or, as it says in the insurance policies, which nobody reads: “We have the right and discretionary authority to determine eligibility for benefits and to construe the provisions of this agreement.”
Blake, a retired anesthesiologist from East Greenwich, found out just how crazy, costly and insulting that discretionary authority could be. He found that being disabled did not necessarily mean that disability insurance kicks in.
In 1995, Blake joined Rhode Island Anesthesiologists Group at Rhode Island Hospital. When we talked back in March, he told me that he loved his job but his work day could be 10 or 12 hours long. After 28 years of it, he felt pain in his back and legs. He went to the Hospital For Special Surgery in New York City for spinal-fusion surgery. He ended up with four screws and two rods in his back, and was in a fiberglass shell for 12 weeks and in rehab for 16. But, at 62, he went back to work. The pain returned. He took a surgeon’s advice and retired.
He applied for benefits under the disability insurance coverage he had as part of his employee benefits. He had the crazy notion that since he was disabled and couldn’t work, he’d be eligible.
Six weeks after his retirement, the insurance company sent his records to an orthopedic surgeon, who denied the claim. Blake never saw the surgeon.
It was the beginning of a long appeal process. He concedes that most people probably couldn’t afford to take it to the limit. He could. And he and his lawyer, Scott Kilpatrick, not only pursued the appeal but became key players in the effort to do away with the absurd discretionary clause in insurance policies. Kilpatrick has been one of the most outspoken supporters of changing the law in Rhode Island. He has a fascinating collection of cases that illustrate how the denial of benefits often has little to do with reason or reality.
After a long slog through the appeals process, Blake and Kilpatrick prevailed. The insurance company agreed to pay Blake all that he was due.
And on Tuesday, they prevailed again as the governor signed the bill that takes the discretionary clause out of health, life, long-term-care and disability insurance policies.
“Obviously, the insurance companies are not happy,” said Rep. Brian Patrick Kennedy, D-Westerly, the sponsor of the legislation in the House. “This benefits the consumers, not the insurance companies.”
And it shows how one citizen’s voice can still make a difference.
Category: ERISA Law