Opinion ID: 27046
Heading Depth: 1
Heading Rank: 4

Heading: reduction of benefits due to thurmon’s

Text: MEDICARE ELIGIBILITY We first consider whether the district court properly awarded Thurmon the amount by which Provident reduced his benefits on account of his Medicare eligibility. The district court found that both the Medicare provision and the subsequent Medicare endorsement on which Provident had relied to reduce Thurmon’s benefits were invalid, and thus that Provident was without authority to reduce the amount of Thurmon’s benefits because of his Medicare eligibility. A. Validity of the Medicare Endorsement At trial, Provident introduced a copy of an endorsement that authorizes Provident to reduce benefits to the extent of an insured’s Medicare eligibility. The endorsement recites that it is “made part of the Policy to which it is attached” and indicates that it revises Policy Form MMB-LA 9/92, the form of Thurmon’s policy. Provident contends that the endorsement was validly added to Thurmon’s policy effective July 1, 1997. A change or addition to an insurance policy is valid only if it complies with the terms of the policy and with Louisiana law. The “Entire Contract Changes” clause of Thurmon’s policy provides 5 that alterations or additions to the policy must be “approved by [Provident’s] executive officer and endorsed or attached to this Policy” to be valid. Further, La. Rev. Stat. § 22:628 provides that no modification of an insurance policy is valid unless “it is in writing and physically made a part of the policy . . . or it is incorporated in the policy . . . by specific reference to another policy or written evidence of insurance.” A written modification is deemed to be physically made a part of a policy “whenever such written agreement makes reference to such policy . . . and is sent to the holder of such policy . . . by United States mail, postage prepaid, at such holder’s last known address as shown on such policy . . . or is personally delivered to such holder.” Id. La. Rev. Stat. § 22:628 embodies the policy that the parties to an insurance contract should have the entire contract in their possession. Lindsey v. Colonial Lloyd’s Ins. Co., 595 So. 2d 606, 611 (La. 1992). An insurer bears the burden of showing that an endorsement was validly made a part of the policy. See Brown v. Permanent Gen. Ins. Co., 783 So. 2d 467, 471 (La. Ct. App.), writ denied, 793 So. 2d 196 (La. 2001). We agree with the district court that Provident has failed to show that the Medicare endorsement was validly added to the policy. The record is devoid of evidence that indicates that Provident ever sent or delivered the endorsement to Thurmon, as Provident admits § 22:628 requires. Accordingly, on this record, the Medicare 6 endorsement cannot be said to have been validly added to Thurmon’s policy. B. Validity of the Medicare Provision Provident contends that even if the Medicare endorsement is invalid, the reduction of Thurmon’s benefits was authorized by the Medicare provision. Although it admits that the Medicare provision was unenforceable at the time the policy was issued by virtue of La. Rev. Stat. § 22:213(D) (repealed 1995), which precluded an insurer from considering the benefits payable by government plans such as Medicare when determining benefits under the policy, Provident contends that the provision became enforceable after the repeal of § 22:213(D) in 1995 and thus was effective at the time of Thurmon’s claims. Pursuant to the policy’s “Conformity with State Statutes” clause, “[a]ny provision of this Policy which, on the Policy Date, is in conflict with the statutes of [Louisiana] is hereby amended to conform to the minimum requirements of such statutes.” The policy schedule reveals that the “Policy Date” is January 28, 1993. It is not disputed that on January 28, 1993, the Medicare provision conflicted with Louisiana law and thus was amended out of the policy. Provident has not pointed to, nor have we found, any provision in the policy by which the stricken Medicare provision would be revived after the repeal of the conflicting statute. In these circumstances, it appears that the Medicare provision was not a valid part of the policy at the time of Thurmon’s claims. 7 Nevertheless, Provident argues that the policy was renewed subsequent to the repeal of § 22:213(D) in 1995 and that the Medicare provision was thereafter a valid part of the policy. As an initial matter, we observe the “Conformity with State Statutes” clause specifies that the relevant date for determining whether a policy provision conflicts with state law is the “Policy Date,” which the record shows to be January 28, 1993. Further, we observe that there is no evidentiary basis to conclude that there was a post-1995 renewal. Although the record is clear that the policy remained in effect until March 1999, Provident has not provided any direct or indirect evidence of the policy’s renewal after 1995. On this record, we must conclude that the Medicare provision was not effective at the time of Thurmon’s claims. We therefore affirm the district court’s award of the amounts by which Provident reduced Thurmon’s benefits.