Colonial Penn Ins. Co. v. Heckler
United States Court of Appeals for the Third Circuit
September 12, 1983, Argued ; November 16, 1983, Decided
[*433] OPINION OF THE COURT
WEIS, Circuit Judge.
Congress amended the Medicare Act to provide that benefits would not be available when an individual's medical expenses could be paid under an automobile insurance policy. Because of unforeseen losses that would be caused by this change, the plaintiff insurance company sought an injunction and declaratory relief against application of regulations implementing the statute. The district court held that it did not have jurisdiction over the challenge [**2] to the regulations except for the constitutional claims by way of mandamus. We conclude that all claims were properly before the court, that plaintiff has standing, but, nevertheless, we agree that plaintiff is not entitled to relief. Accordingly, the dismissal by the district court will be affirmed.
Colonial Penn Insurance Company applied to the district court for injunctive and declaratory relief from regulations stating that Medicare benefits would be secondary to coverage provided by automobile insurance policies. Plaintiff objected to the regulations because they required the company to make unanticipated payments on claims arising under previously issued policies. The district court dismissed statutory challenges to the regulations for lack of subject matter jurisdiction and dismissed all others for failure to state a claim.
The plaintiff's complaint alleges that its yearly insurance policies cover medical and hospital expenses for injuries received in automobile accidents. The contracts either comply with state "no-fault" statutes or contain a medical payment clause as part of an automobile liability policy.
Colonial Penn writes policies for many persons over age 65, [**3] and concentrates on that segment of the population in its sales promotion. The policies, which are reviewed or approved by the various state insurance departments, provide that payments for medical expenses shall be made only to the extent that they are not covered by Medicare. Because medical expense coverage is secondary to Medicare, the company has been able to offer lower insurance premiums to senior citizens.
In December 1980, as part of the Omnibus Budget Reconciliation Act of 1980, Congress amended section 1862(b) of the Social Security Act, 42 U.S.C. § 1395y, to realign coverage under the Medicare program. Pub.L. 96-499, § 953, 94 Stat. 2599, 2647 (1980). As modified, the statute states that Medicare payments would not be available "with respect to any item or service to the extent that payment has been made, or can reasonably be expected to be made (as determined in accordance with regulations) . . . under an automobile or liability insurance policy . . . or under no fault insurance. Any [Medicare] payment . . . shall be conditioned on reimbursement. . . ." 42 U.S.C. § 1395y(b)(1). The amendment, which became effective [**4] on December 5, 1980, was designed to make "medicare payment liability secondary in automobile insurance cases." H.Rep.No. 1167, 96th Cong., 2d Sess. 352 (1980), reprinted in 1980 U.S. Code Cong. & Ad. News 5526, 5717.Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.
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721 F.2d 431 *; 1983 U.S. App. LEXIS 15210 **
COLONIAL PENN INSURANCE COMPANY, Appellant v. MARGARET HECKLER, Secretary of Health and Human Services, Appellee
Prior History: [**1] Appeal from the United States District Court for the Eastern District of Pennsylvania.
regulations, Medicare, policies, coverage, district court, benefits, insurer, judicial review, zone, constitutional claim, reimbursement, courts, Medicare Act, secondary, cases, constitutional challenge, insurance company, insurance policy, provisions, contracts, decisions, mandamus, sentence, court of appeals, state law, policyholders, retroactively, pre-existing, provider, premium
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