"You know what we did when we got that letter?" Warren Jones asks. "We went out to dinner to celebrate."
After that, though, Megan continued to try to determine the source of the dimpling. On September 13 she again met with Dr. Williams (the appointment during which she learned routine office visits weren't covered), who suggested she follow up with another doctor.
Megan saw that doctor on October 14. He scheduled her for a biopsy six days later. The biopsy determined that she had breast cancer.
On November 3 Megan was sitting in the Denver West Surgical Center, flanked by her husband and her two best friends, waiting to be prepped for a double mastectomy.
A procedure that Gary Cushner assured her was covered by her new insurance policy.
On March 1, 1995, after Megan had lost both breasts, undergone her first round of chemotherapy, racked up $30,000 in doctor bills and was awaiting a second round of chemo and reconstructive surgery, she received a letter from AMS informing her that she was being denied "for all medical and drug claims" resulting from her pre-existing condition as it existed on "4-7-94, 4-11-94, and 9-13-94." Those dates referred to the two times Megan had visited her doctor concerning the "dimpling" on her breast, as well as the trip to the Mammography Center.
"Please refer to your Certificate or Summary Plan Description booklet for the definition of a pre-existing condition," the letter advised. Megan tried to do so, but her policy said nothing about pre-existing conditions.
She asked Cushner to find out what the problem might be. He called AMS and requested a review of the denial; Megan consented to release the necessary medical records. On April 19 AMS sent Cushner a letter explaining that because those records indicated an "indeterminate abnormality" prior to the October 1, 1994, date Megan Jones's policy became active, "services related to the breast mass are denied as pre-existing since the patient received treatment and consultation prior to her effective date."
In most health-insurance policies now sold in the United States--especially to individuals and small groups who don't have the bargaining power to negotiate the clause out of the contract--pre-existing condition clauses are quite common. They usually exempt from coverage any current illness or disease from which applicants knew they were suffering when they applied for insurance. Colorado law restricts the duration of any such clauses to six months, which means that after half a year, insurance companies must cover even pre-existing conditions. "Standard" is the way most insurance officials refer to such clauses. But there were a few things about Megan Jones's case that were anything but standard.
First, Megan Jones says she had no idea she had breast cancer. She says her doctor never used the word with her, and the mammogram results said there was "no suspicion of cancer." In fact, the letter from the Mammography Center was one of the reasons Megan felt comfortable about switching insurance policies.
But even more significant, Megan Jones's AMS policy didn't actually contain a pre-existing clause. Due to what the company calls computer error, AMS had issued approximately 580 policies that failed to include any pre-existing-condition language. After the company discovered the error sometime in March 1995--at about the same time it was initially refusing to cover Megan Jones--it issued letters to most of the people who possessed those 580 policies, saying it was replacing its old schedule of benefits with a new schedule of benefits that did nothing to materially change the old schedule (although the new schedule did include a pre-existing-condition clause where none had been before).
Megan Jones never got that letter. Instead, after AMS had discovered that her policy contained no pre-existing-conditions clause, she received a second denial of her claims--because of pre-existing conditions.
Devastated by the insurance company's refusal to pay her bills and in need of further surgery and treatment to try to halt the rapidly advancing cancer, she took her policy and both denial letters to a lawyer: Dan Schendzielos. On May 10 he filed Jones's lawsuit against AMS, the United Wisconsin Life Insurance Company and agent Gary Cushner. To Schendzielos, the case seemed simple: The insurer was denying coverage (that the agent had guaranteed) on the basis of a pre-existing-condition clause that didn't exist.
The insurance company responded by dropping the Joneses' insurance coverage altogether. "This means we have set it aside from the date of issue, as though it was never in effect," reads the June 23, 1995, letter from AMS. The insurance company refunded the Joneses just $120 of the almost $3,000 the family had paid in premiums, claiming that it was deducting the cost of covering Chris's broken jaw.
A week later the company filed its legal response to Jones's suit. It charged her with having "unclean hands" and "omission of material fact" in her application for coverage. Specifically, AMS said, Megan Jones had failed to check the "Cancer/Tumor" box on page two of the application.
In September Schendzielos asked Arapahoe County District Court Judge Thomas Fasing for an expedited trial date because Megan Jones's doctor thought there was a good chance the plaintiff wouldn't live out the year. AMS's attorney, James Gigax, objected to the motion, accusing Megan Jones of tactics that "emit an overpowering odor of chicanery and sharp dealing." Gigax labeled one of his motion's arguments "Merry Christmas, Mrs. Jones: A Holiday Trial Date."
