Wisconsin SC to rule on coverage for surrogates

By Kathy Woods | Nov 23, 2009

MADISON, Wis. (Legal Newsline)-The Wisconsin Supreme Court is expected to make a decision on whether or not insurance companies can refuse to pay for the maternity costs of surrogate mothers.

Although the decision may not be binding in other jurisdictions it could be a persuasive precedent if the facts and policies are similar.
The case came to the Wisconsin high court after a dispute between MercyCare HMO Inc. and two surrogate mothers who were denied coverage by the company during their pregnancies.

In 2002, Janesville, Wis.-based MercyCare filed a certificate with the Wisconsin insurance commissioner that excluded "surrogate mother" services from pregnancy benefits without defining such services. The commissioner approved the certificate.

While covered by MercyCare the two women entered into agreements to be "gestational carriers" for other parents. While pregnant both were denied coverage.

One of the women filed a complaint with the Office of the Commissioner of Insurance. MercyCare said based on the language in the 2002 contract filed with the commissioner's office, they were in their right to deny coverage.

While the Wisconsin insurance commissioner's office was reviewing the denial, MercyCare filed a new policy form which revised the exclusion and contained a definition of "surrogate mother" excluding coverage for insured acting as surrogates. The commissioner did not approve the form, stating that it violated Wisconsin statute.

In 2006, Wisconsin insurance commissioner's office issued a Notice of Hearing alleging that MercyCare had violated Wisconsin statute when denying the two women coverage.

The commissioner concluded that "the legislative history indicates that the statute's purpose is one of inclusiveness, and that the decision to become pregnant is an intensely personal decision. For OCI to give an insurer license to inquire into why a woman is pregnant or whether she intends to keep her baby would be improper."

MercyCare petitioned the Rock County Circuit Court for review. The court agreed with MercyCare, saying that the exclusion in the policy applied uniformly to all covered persons and that the statute permits such exclusions. The commissioner appealed.

Wisconsin statute states that every group disability insurance policy which provides maternity coverage shall provide maternity coverage for all persons covered under the policy.

"Coverage required under this subsection may not be subject to exclusion or limitations which are not applied to other maternity coverage under the policy," the statute says.

Insurance companies vary greatly in their treatment of surrogates.

Most private insurance companies will not pay for fees involving
fertility treatment, while other insurance companies will pay for some medications involving fertility treatment.

Some insurance companies absolutely refuse to cover the costs of surrogacy. These companies usually put a clause in the policy stating that they will not cover "surrogate parenting."

Some of the language used in insurance policies, have ambiguous or uncertain terms, and depending on how they are interpreted they may or may not include surrogacy. This is what the high court will define.

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