The Unwanted Ones

Page 4 of 6

Insurance agent John Moore says he does not recall comparing the Stums' son to a defective automobile, but remembers well his fruitless efforts to find health insurance for the family. "I spent about three weeks looking for a product that would help them," he says. "I finally came up with a package involving three different policies."

The plan, however, contained numerous loopholes and minimal coverage, so the Stums declined it. Moore's own company, Equitable Variable Life Insurance Company, "wouldn't touch [Down's syndrome applicants] because they know a big claim is coming, they just don't know when," he says. "It's like with juvenile diabetes--you know the kidneys will fail at some point, you just don't know when. And when it happens, it's going to be very costly."

ABSOLUTELY WRONG, SAYS Pat Brown, who heads the state's largest organization representing retarded people. "What the physicians who are experts say about these children is that over half are at no additional risk for serious health problems."

Even the incidence of heart defects, the first thing cited by most insurance officials, is not valid grounds to deny all children with Down's syndrome, some treating physicians say. "While heart disease is prevalent, a lot of the defects are so minor they don't require surgery," explains Dr. Ronald Fischler, a Scottsdale pediatrician. Fischler was medical director of the Childhood Evaluation Center of Central Arizona, which diagnoses and treats children with developmental disabilities at St. Joseph's Hospital in Phoenix, for three years before entering private practice recently.

Like Magalnick, Fischler says experience has taught him most children with Down's syndrome are healthy. "The number who develop leukemia or have seizures may be statistically increased, but you're really talking about fractional numbers," he says. "It's really a pretty healthy population. They shouldn't be hard to insure."

Statistics abound to show that these children do have a higher risk for many types of ailments, Linkner argues. "We are constantly reviewing our guidelines to incorporate new research," he says. "If the doctors want us to review our guidelines in line with current medical opinion, then it is certainly a very appropriate thing for us to do. But I've not had a request from any physician to do so."

Insurance officials cite the statistical data over and over in explaining policies that discriminate against children with Down's syndrome. Yet, even though BCBS insures 79 million people nationwide and holds 25 percent of the health insurance policies in Arizona, nowhere in its vast corporate labyrinth is anyone keeping track of how much money is spent on the children with Down's syndrome scattered among its many employer group policies, Linkner admits. "Actuarial information is, of course, very useful but you have to balance it against the cost, administratively, to obtain it," he says.

Brown, of the ARC, says she ran up against a brick wall in trying to obtain actuarial data, even from companies that administer health insurance to children with Down's syndrome in states which require it. (Fifteen states have mandated insurance for so-called "high-risk" categories of people, usually the disabled or chronically ill. Arizona does not require such coverage nor offer it through a state-subsidized "high-risk pool.")

"We feel it's very important that the companies produce information showing their actual losses on people with Down's syndrome if they're going to claim it's legitimate to discriminate against this group," Brown contends. "Otherwise, they're just saying, `Trust us, we're being fair,' and we're not prepared to do that anymore, based on what we're hearing from treating physicians."

The statistics used by BCBS and others come primarily from the thousands of published studies that have subjected Down's syndrome children to microscopic examination. If other groups of children were studied that intensively, doctors say, insurers might be surprised at the results.

An increase in upper respiratory infections, for instance, is one of the frequent reasons cited by insurance officials for the "high-risk" label attached to children with Down's syndrome. But, says Magalnick, "The increase in upper respiratory infections is no greater than for children in a home where both parents smoke, or children whose parents have severe allergies, or children in daycare."

Would anyone, he adds with a touch of rhetoric, consider denying children in these groups health insurance?

SUSAN GALLINGER'S EYES narrow as she listens to the facts of the Palandri case. She is brand-new to the job of state director of insurance, having barely settled into the glass-lined headquarters suite on North Third Street.

But Gallinger is a seasoned hand at watching the insurance industry's machinations. During four years as the agency's legal counsel and then assistant director, interspersed with a year in private practice representing the industry, Gallinger also learned the limits of regulatory law.

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Kathleen Stanton