|The Fifth Circuit U.S. Court of Appeals affirmed a district court's decision
that the Americans with Disabilities Act (ADA) anti-discrimination provision
does not regulate the terms and content of goods and services, including health
insurance policies. Therefore, the insurance company that issued a policy
containing an AIDS limit of $10,000 was found to be not liable for over $400,000
in hospital bills for AIDS treatments (McNeil v. Time Insurance Co., No.
98-10585, March 1, 2000). By this decision, the Fifth Circuit joins courts in
the Third, Sixth, and Seventh Circuits reaching the same conclusion (Ford v.
Schering-Plough Corp., 145 F.3d 601, 613 (3d Cir. 1998; Doe v. Mutual of Omaha
Insurance Co., 179 F.3d 557, 559-63 (7th Cir. 1999), cert denied, 120 S.Ct. 845
(2000); and Parker v. Metropolitan Life Insurance Co.,121 F.3d 1006, 1012 (6th
Cir. 1997)). A decision in the Second Circuit came to the opposite conclusion
(Pallozzi v. Allstate Life Insurance Co.,1999 WL 1079973 at *3-6 (2d Cir.
Dr. Michael McNeil purchased a health insurance plan which became effective May
1, 1994. The policy limited coverage for several specific health problems. One
of these limitations was for Acquired Immune Deficiency Syndrome (AIDS) and AIDS
Related Complex (ARC) to $10,000 during the first two years of the policy.
After two years, the policy provided maximum benefits.
In September 1994, Dr. McNeil was diagnosed with AIDS. He was admitted to the
hospital and treated for pneumonia. Time Insurance Co. paid the first $10,000
of his costs but nothing more. Dr. McNeil subsequently incurred over $400,000
in medical expenses. He died on March 1, 1995. Before his death, Dr. McNeil
brought suit against Time, which the executor of his estate continued after his
The suit claimed, among other things, that Time's policy violated Title III of
the ADA. The relevant portion of Title III reads:
No individual shall be discriminated against on the basis of disability in
the full and equal enjoyment of the goods, services, facilities, privileges,
advantages, or accommodations of any place of public accommodation by any
person who owns, leases (or leases to), or operates a place of public
The plaintiff argued that any limitation on enjoyment of the goods and services
of a place of public accommodation violates the statute. He urged the court to
read the statute expansively in the light of the purpose of the statute and the
EEOC administrative regulations interpreting it. Time, on the other hand,
pushed for a narrower reading based on Congress' deference to state insurance
law and on the impact of a broad reading on the insurance industry.
Specifically, Time proposed that the statute merely regulated access to--not the
content of--goods and services and therefore the policy was nondiscriminatory
under the ADA.
The court read the statute to say: no owner, operator, lessee, or lessor of a
place of public accommodation shall discriminate against an individual by
denying him or her, because of handicap, the full and equal enjoyment of the
goods and services that the place of public accommodation offers. Further,
"...the plain language of the statute demonstrates that a business is not
required to alter or modify the goods or services it offers to satisfy Title
III. The prohibition of the statute is directed against owners, etc., of places
of public accommodation. It prohibits them from discriminating against the
disabled. The discrimination prohibited is that the owner, etc., may not deny
the disabled the full and equal enjoyment of the business's goods and services."
[Emphasis added by the court.]
The court acknowledged that, in many cases, the disabled simply will not have
the capacity or ability to enjoy the goods and services of an establishment
"fully" and "equally" compared to the non-disabled. Examples were offered of
movies, tennis matches, and symphonies, which may be enjoyed by the blind or
deaf, but will not be as "fully" enjoyed by them as by the non-disabled. The
court commented, "It is a flawed and unreasonable construction of any statute to
read it in a manner that demands the impossible." Therefore, the language of
the statute can only "reasonably be interpreted to have some practical, common
"In sum, we read Title III to prohibit an owner, etc., of a place of public
accommodation from denying the disabled access to the good or service and from
interfering with the disabled's full and equal enjoyment of the goods and
services offered. But the owner, etc., need not modify or alter the goods and
services that it offers in order to avoid violating Title III." The "good" in
this case was the insurance policy and Dr. McNeil had non-discriminatory access
to the insurance policy.
The appellate court therefore affirmed the district court's dismissal of the
Title III claim.
In a footnote to the case, the court stated: "Because we reach our conclusion
based on the plain language of the statute, we need not consider the
administrative regulations interpreting the ADA. Any attempt to rely on those
regulations, moreover, would be fruitless because they are internally
contradictory on this specific issue."