January 15, 1987

Mr. Lyndon L. Olson, Jr. Chairman StateBoard of Insurance 1110 San JacintoBoulevard Austin.Texas 78701

Dear Mr. Olson: OpinionNo. m-621

Re: Claims for loss or impairment of speech orhearing under article 3.70-2(G)of the InsuranceCode

You have asked numerous questions about the construction of article 3.70-2(G)of the InsuranceCode,which provides:

Insurers, nonprofit hospital and medical serviceplan corporationssubject to Chapter 20 of, this code, and health maintenance organizations transacting health insurance or providing other health coverage in this state shall offer andmake available, under group policies, contracts, and plans providing ~hospitaland medical coverage on an expense incurred. service or prepaid basis, benefits for the necessary care and treatment of loss or impairment of speech or hearing that are not less favorable than for physical illness generally, subject to the same durational limits, dollar limits, deductibles, and coinsurance factors. Such offer of benefits shallbe subject to the right of the group policy or contract holder to reject the coverage or to select any alternative level of benefits if such right is offered by or negotiated with such insurer, service plan corporation, or health maintenance organization. (Emphasisadded.) Initially, we note that the language of this provision is exceedingly difficult to construe in a manner that makes sense. We believe that the legislature should address itself to amending it in itsnext regular session. The phrase “to selectany alternative level of benefits if such right is offered by or negotiated with such insurer”has given rise to difficultquestions of interpretation. You inform us that some insurers have construed that phrase to give the insurer the optionof providing coverageof certain speechandhearing disabilitiesandnot others. Specifically,some insurershave refused

p. 2799Mr. Lyndon L. Olson, Jr. - Page 2 (JM-621)

to cover treatment for loss or impairment of speech or hearing if th,e loss or impairment is a birth defect or developmental problem rather than a condition secondary to another illness or injury. You have asked us to determinewhat ismeant by the phrase "alternate level of benefits" in article ,3.70-2(G).
Article 3.70-2(G) requires insurers that provide health coverage inTexas to offer plansproviding "benefits for the necessary care and treatmentof loss or impairmentof speech or hearing that are not less favorable than for physical illness generally." That phrase requires an offer of coverage for loss or impairment of speech or hearing; it does not authorize an initialoffer limitingcoverage to certain types of speech or hearing problems. Therefore, the initial offer must includebenefits for treatmentof speech and hearing problems, regardless of the cause of such problems, and those benefits must be as favorable as benefits for physical illness generally. See Attorney General Opinion JM-5 (1983).Article 3.70-2(G)also allowsthe insured to reject coverage for speech and hearing problems altogether. What the statute does not make clear iswhether, once the initial offer is rejected, the insurer may offer coverage for loss or impairment of speech or hearing from certain causes and not others. Although the meaning of the phrase is obscure, we think that because the legislature chose the phrase "alternate level of benefits" .rather than "alternate coverage," an insurermay not offer or issue a plan that covers only certain types of speech and hearing problems and not others. In other words, the insured and insurermay negotiate about dollar limits,deductibles,and otherbenefits,but theymay not cover some hearing problems and exclude fr& coverage speech and hearing problems that stem from certain causes.
SUMMARY
Under article 3.70-2(G), an insurer may not offer or issue a plan that covers only certain types of speech and hearing problems and not others.

JIM MATTOX AttorneyGeneral of Texas
JACK HIGHTOWER FirstAssistantAttorney General

MARY KELLER ExecutiveAssistantAttorney General

p. 2800Mr. Lyndon L. Olson, Jr. - Paw 3 (JM-621)

RICK GILPIN Chairman.Opinion Committee Preparedby Tony Guilloryand SarahWoelk AssistantAttorneysGeneral

p. 2801