Opinion ID: 1602571
Heading Depth: 2
Heading Rank: 3

Heading: MercyCare Policies

Text: ¶ 103 The 2002 MercyCare policy provides in relevant part: PREGNANCY BENEFITS ... Non-Covered Services:  Surrogate mother services.  Elective abortions.  Maternity services received out of the service area in the last 30 days of pregnancy without prior authorization from the Plan except in an emergency. Prior authorization is based on medical necessity.  Amniocentesis or chorionic villi sampling (CVS) solely for sex determination. ¶ 104 MercyCare relies on the term, Surrogate mother services, for its exclusion of coverage for J.M.'s and C.S.'s prenatal, delivery and postnatal care. Surrogate mother services is not defined in the 2002 policy. That term could encompass a variety of healthcare services, some of which are not at issue in this case. ¶ 105 For example, surrogate mother services could include the extensive hormone therapy that is required prior to implantation of zygotes [11] in order to permit a gestational carrier to carry a child to which she has provided no genetic material. Or, it could refer to similar treatment for a surrogate who has provided the ovum for the zygote with which she will be impregnated. It could also be read to cover the usual prenatal, delivery and postnatal care after the pregnancy has begun for a pregnant woman who carries a child under any type of surrogacy. Or it could encompass more than one of those circumstances, or perhaps some circumstance that I have not mentioned. ¶ 106 Based on this lack of precision in defining surrogate mother services, I conclude that the 2002 policy is ambiguous. The Commissioner also concluded that the 2002 MercyCare policy is ambiguous because it does not adequately define surrogate mother services. [12] ¶ 107 An ambiguous insurance policy, with undefined terms, is construed as it would be understood by a reasonable insured. Acuity v. Bagadia, 2008 WI 62, ¶ 13, 310 Wis.2d 197, 750 N.W.2d 817. Policy language that relates to coverage and is ambiguous is construed in favor of the insured, as affording coverage. Id. ¶ 108 Because MercyCare did not define surrogate mother services as healthcare services provided to a woman who contracted to carry a child to which she contributes no genetic material and to whom she asserts no rights of parentage, I construe the policy against MercyCare and conclude that the costs of the healthcare provided to J.M. and C.S. must be born by MercyCare.
¶ 109 The 2005 MercyCare policy provides in relevant part: PREGNANCY BENEFITS ... Non-Covered Services: Treatment, services or supplies for a surrogate mother or any pregnancy resulting from your service as a surrogate mother. ... SURROGATE MOTHER Surrogate mother means a woman who, through in vitro fertilization or any other means of fertilization, gives birth to a child which she may or may not have a genetic relationship to, or an individual who provides a uterus for the gestation of a fertilized ovum obtained from a donor when the child will be parented by someone other than the woman who[ ] gives birth. ¶ 110 As if in recognition of the ambiguity in its 2002 policy, while C.S.'s complaint was pending in the Office of the Commissioner of Insurance, MercyCare submitted the 2005 policy for consideration. The 2005 policy defines surrogate mother, as set out above. ¶ 111 The Commissioner denied approval of the 2005 policy based on his authority under Wis. Stat. § 631.20(2)(a)3. [14] The Commissioner explained: While MercyCare has argued that it is only trying to limit its coverage to provide personal health insurance and not cover expenses incurred in activities from which the insured profits or expenses are incurred on behalf of persons not covered under the policy.... [T]here is nothing in the 2005 Contract's definition of surrogate mother that limits coverage to those situations. Rather, as OCI argues, the definition permits MercyCare broad discretion in applying its exclusion to any number of women based solely on how and why they are pregnant, and further has the unintended effect of restricting coverage to some insureds they may or may not intend to exclude. The fact that the policy drafter does not understand the implications of the language in its own policy supports a finding the language is unnecessarily verbose or complex. ¶ 112 Wisconsin Stat. § 631.20(2)(a)3. permits the Commissioner to disapprove a proposed insurance policy upon a finding that the policy is unnecessarily verbose or complex in language. I agree with the finding of the Commissioner. The definition that MercyCare employs in the 2005 policy does not accomplish the purposes MercyCare says it hoped to achieve and could easily mislead a reasonable insured.