Behr v. Blue Cross Hosp. Service, Inc., of Missouri
| Citation | 715 S.W.2d 251 |
| Decision Date | 15 July 1986 |
| Docket Number | No. 67828,67828 |
| Parties | Anthony R. BEHR and Maryrose E. Behr, Plaintiffs-Respondents, v. BLUE CROSS HOSPITAL SERVICE, INC., OF MISSOURI and Missouri Medical Service, Inc., Defendants-Appellants. |
| Court | Missouri Supreme Court |
Jonathan W. Igoe, St. Louis, for defendants-appellants.
Anthony R. Behr, pro se.
Anthony and Maryrose Behr, as subscribers to a group health care program, sued Blue Cross Hospital Service, Inc., of Missouri and Missouri Medical Service, Inc., alleging breach of insurance contract, detrimental reliance and failure to pay maternity benefits. The trial court awarded the Behrs $938.00 in damages and the Court of Appeals, Eastern District, reversed. Judgment for plaintiffs affirmed.
Mr. Behr, an attorney, and his wife were eligible to obtain health care service benefits through a group contract between defendants and the Bar Association of Metropolitan St. Louis. In August 1981, the Behrs obtained coverage under the "high option program" offered the Bar Association; in anticipation of having children they enrolled in the high option program because it provided greater maternity coverage. The high option program, issued by Blue Cross Hospital Services, Inc., and Missouri Medical Services, Inc., featured an annual $100 deductible and a 100% medical reimbursement coverage.
On August 17, 1983, the Bar Association notified its members that defendant insurers were no longer willing to renew the high option program because of its "unrealistically high rates" and that a new plan was recommended. On September 21 1983, the Bar Association offered to its membership a new comprehensive plan, the "matrix" program. The matrix program provided for lower "dues," an annual $300 deductible, a 20% co-payment paid by the insured for the first $5,000 in medical expenses and thereafter 100% coverage. The high option program was scheduled to terminate on September 28, 1983.
On September 24, 1983, the Behrs notified insurers that Maryrose Behr was 9 months pregnant. The Behrs sought to extend the high option policy for an additional month and were willing to pay high option dues: insurers declined. The Behrs paid dues under the matrix program for the month of October.
On October 4, 1983, Mrs. Behr gave birth to a daughter by normal delivery. Insurers reimbursed the Behrs according to the matrix program for medical expenses incurred after September 28, 1983. The Behrs sued to claim $938.00, the difference in benefits between the high option program and the matrix program.
Appellants contend the trial court erred in finding that liability for maternity care expenses attached under the high option program because: the high option program terminated on September 28, 1983, prior to the birth of the Behr's child; and, the Behrs had no vested rights in the high option program because a new program was made available after September 28, 1983, and the high option program provided membership benefits only at the time medical expenses were incurred during the life of that policy. The Behrs respond that their rights in the high option program had vested and attached prior to September 28, 1983; the termination of their rights was unconscionable and against public policy; and, they had detrimentally relied on the high option program.
The issue is whether the group insurance policy, issued by appellants, affords coverage to a policy holder for expenses incurred by a pregnancy after the termination of the policy where the pregnancy exists prior to termination.
It is widely held that a master group policy can be cancelled or modified by the group sponsor so as to terminate the coverage of an individual member without the latter's consent if such right is given by the contract. Satz v. Prudential Ins. Co. of America, 225 S.W.2d 480, 482 (Mo.App.1949); Blissenbach v. Provident Life & Acci. Ins. Co., 689 S.W.2d 707, 708 (Mo.App.1985); see Annot. Group Policy Coverage Termination, 68 A.L.R.2d 249, 255 (1959).
The Blue Cross Hospital Service Group Membership Certificate: Series A provides:
II. MEMBERSHIP AGREEMENT AND PERIOD
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B. The membership period shall begin on the date the member is accepted by BCHS which is the service date for hospital care, as such date appears on BCHS records. The membership shall continue until this Certificate or coverage hereunder is terminated for any reason as provided herein.
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VII. TERMINATION
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G. If the Group Sponsor terminates its enrollment agreement with BCHS, or makes available to the group another group hospital care program, or indemnity therefor, this Certificate shall terminate with the termination of the enrollment agreement or on the effective date of such other program, without regular conversion privileges.
The Blue Shield UCR Program Certificate provides:
VIII. AGREEMENT DURATION, RENEWAL AND CANCELLATION
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E. Cancellation or termination of this Agreement for any reason will automatically terminate the rights and privileges herein specified for all participants....
The Bar Association, as group sponsor, made available to the Behrs another hospital care program (the matrix program). Appellants therefore contend that when the matrix program was made available, the Behrs' membership in the high option program was properly terminated. Appellants assert, and the court of appeals agreed, that membership benefits shall be those for which dues are being charged at the time care is provided; therefore, the only benefits to which the Behrs could be entitled after September 28, 1983, are those provided in the matrix program. Appellants also rely on the Blue Cross Group Membership Certificate: Series A which provides:
I. DEFINITIONS
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J. MEMBERSHIP BENEFITS. Those benefits described in this Certificate, which become applicable to a participant, as evidenced by his membership card and by the records of BCHS. The membership benefits shall, in any case, be the ones for which dues are being charged and remitted at the time the hospital care is provided hereunder....
However, to defeat liability on an insurance contract, the termination of the policy must be effective before any liability attaches. Kingsland v. Missouri State Life Ins. Co., 228 Mo.App. 198, 66 S.W.2d 959, 961 (1934), rev'd on other grounds Schuerman v. General Amer. Life Ins. Co., 232 Mo.App. 352, 106 S.W.2d 920 (Mo.1937); Lutsky v. Blue Cross Hospital Serv. Inc., 695 S.W.2d 870, 874-875 (Mo. banc 1985).
The Behrs, relying on Blue Cross-Blue Shield v. Turner, 43 Ala.App. 542, 195 So.2d 807 (1966), contend that liability attaches under the high option program at the time of pregnancy when the treatment became necessary and survives the termination of the policy. Appellants, relying on Lundquist v. Illinois Life & Acci. Ins. Co., 24 Ill.App.2d 316, 164 N.E.2d 293 (1960), contend that no liability attaches under the policy until the hospital services are actually rendered in the hospital.
In Turner, the group insurance policy provided for maternity care benefits "for any condition arising out of and during pregnancy." The court held that the liability of the insurer attached at the moment of conception and that through the payments of premiums the insured had obtained an interest in the policy which was sufficient to prevent termination. The court distinguished the policy language from that which was involved in Lundquist, wherein the policy in question provided "when the insured, if a married woman or the wife of the insured, if a dependent, shall while this policy is in force ..., give birth to a child or children, the company will pay the expenses actually incurred in connection therewith...." The court emphasized that under the policy language used in Turner, benefits were provided not just for childbirth but "for any condition arising out of and during pregnancy."
In Blissenbach v. Provident Life & Acci. Ins. Co., the court found the insurance policy to be similar to that of Turner's. The policy provided:
With respect to pregnancy, benefits will be payable as provided above for confinement beginning within nine months after termination of insurance if the pregnancy of the employee or dependent wife exists on the date of such termination, and if benefits would have been payable and the confinement begun on the date of termination of insurance. This provision shall be applicable only if this policy is in effect on the date of commencement of confinement.
The court, relying on Turner, held that the coverage began at the moment of conception and the coverage was for the condition arising out of and during pregnancy; thus, liability attached before termination of the policy could be affected. Id., 689 S.W.2d at 709.
The Blue Cross Group Membership Certificate provides:
I. DEFINITIONS
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Q. MATERNITY CARE. Hospital care in obstetrical cases (including any illness resulting from pregnancy and delivery and after care) including the use of the delivery room and nursery care of the newborn. This care will be provided only after the participant has been in good standing for a continuous period of nine (9) months next preceding the date of admission to the hospital for this care. Maternity care is provided for the member or the member's spouse only. The waiting period shall not apply in premature termination of pregnancy or to any illness resulting from pregnancy if full-term delivery would have occurred or would occur after nine (9) months of continuous membership.
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III. HOSPITAL SERVICES AND OTHER BENEFITS
A. INPATIENT CARE.
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4. Maternity benefits. Maternity care, as defined, to the extent specified in the Schedule of Benefits.
The Blue Shield Membership Certificate provides:
I. DEFINITIONS
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K. OBSTETRICAL SERVICES as used herein means the services of a physician required and rendered in connection with delivery (chil...
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