War kills, injures, and sickens combatants and noncombatants, including innocent civilians. The horrors of war include burns, broken bones, wounds from bullets and shrapnel, brain injuries, nerve damage, loss of limbs, sight and hearing, post-traumatic stress disorder (PTSD), dehydration, famine, and hypothermia. War disrupts the distribution of drugs, blood and other supplies, and interrupts and delays treatments, which only leads to additional morbidity and mortality.
In October 2021, the U.S. State Department estimated that there were approximately 6,600 U.S. citizens residing in Ukraine, in addition to an estimated 16,000 U.S. tourists and short-term visitors. While a more recent State Department assessment was that the number of U.S. tourists and short-term visitors was much lower, U.S. and dual citizens, humanitarian-aid workers, and journalists remain in Ukraine. To date, at least three U.S. citizens have died in the conflict. The fog of war prevents an accurate accounting, but it is likely that other U.S. citizens have been and will be killed and many more injured.
Surely, some of the injured U.S. citizens in Ukraine are payers’ covered lives. This begs the question: Will payers cover treatment of those injuries? As is true with most answers: It depends.
War exclusions
War exclusions are commonly found in insurance policies. This protects insurers from losses, because it is challenging to assess the risks of war and make necessary adjustments to premiums.
Here’s an illustrative exclusion found in a Cigna policy:
Courts have ruled that “war” in such exclusions are limited to conflicts between sovereign nations. In response, some insurers often exclude other types of conflict to cover their bases. For example, a Humana policy excludes:
Because Russia and Ukraine are sovereign nations, payers and courts will most likely consider the Russian invasion of Ukraine a “war” and not, as Russian President Vladmir Putin says, a “special military operation.” U.S. citizens injured in the Ukraine war and requiring non-emergency care will likely not be covered if their policy has a war exclusion. That said, most policies cover emergency care even if there is a separate exclusion for care abroad. It is unclear whether a war injury in Ukraine requiring emergency care would be covered — that’s for payers and the courts to determine.
Exclusion exceptions
If the number of U.S. citizens injured in Ukraine is small, payers may consider making exceptions to exclusions. An exception could attract positive publicity or avoid negative publicity. However, payers will likely weigh such benefits against the potential costs of setting a precedent. And then there’s the negative PR if exceptions are seemingly arbitrary and capricious. If the number of U.S. citizens injured in Ukraine is large, then payers likely will not be willing or able to make exceptions and absorb the losses.
If, however, denials were appealed, then payers would have an opportunity to reconsider. And the outcome may depend upon who appeals. For example, a payer may make more exceptions for Medicare lives due to oversight than for commercial lives. And a denial for an employee of a self-insured employer may get reversed if the reversal was requested by the CEO or another senior manager.
The origin of exclusions
Payers did not invent war exclusions — these exclusions are found in nearly all insurance policies (e.g., life, property, and casualty insurance). And these exclusions evolve over time in response to market pressures and events.
Importantly, payers are not always insurers; in some cases, they manage benefits for government programs or self-insured employers. These government programs and self-insured employers can specify exclusions — this explains variations between and within payers. As they say, if you’ve seen one policy, you’ve seen one policy.
Payers also respond to regulations. For example, California’s Acts of War Exclusions regulation says:
Perhaps this is why Kaiser and some other payers dropped a war exclusion and adopted a military exclusion. For example, Kaiser excludes:
Unfamiliar exclusions
Since Russia’s invasion of Ukraine, Currant had more than a dozen conversations with chief medical officers (CMOs) representing some of the largest payers in the United States. These conversations revealed that CMOs are unfamiliar with their organization’s war exclusions. In fact, several were shocked and dismayed to learn of their war exclusions, were appreciative that it was brought to their attention, and said they would revisit their related policies. Unfamiliarity with these exceptions likely reflects their lack of relevance, as CMOs haven’t had to think about them for a long time. It has been decades since U.S. civilians have been threatened by war in appreciable numbers. CMOs are, however, very familiar with the exclusions they frequently consult when making coverage decisions.
Thinking through the logistics, a few CMOs questioned whether their claims systems would flag Ukraine war injuries, as there is no “war injury” code. Without that, treatment for these injuries would be covered even if their policy stated otherwise; you can’t manage what you can’t measure. And if they could flag it, some expressed discomfort with enforcing the exclusion and would first seek legal counsel.
Future exclusions
Following the 9/11 attacks, many insurers began to specify whether a terrorist act is excluded. Similarly, in response to Russia’s invasion of Ukraine, many payers will likely revisit their war exclusions.
Ideally, payers’ future war exclusions would be limited to combatants, and would simply be replaced with military exclusions. Unfortunately, in an increasingly uncertain and dangerous world, some payers may be reluctant to carve out all noncombatants from war exclusions.
Perhaps some future war exclusions will, at a minimum, carve out innocent civilians that were simply in the wrong place at the wrong time. Doing so could make important distinctions between:
A) Innocent civilians (e.g., dual citizens, tourists, and visitors) who were in Ukraine prior to the war vs. noncombatants who knowingly entered a war zone and put themselves in harm’s way despite a travel ban by the U.S. State Department;
B) Noncombatants who, despite a travel ban, entered a war zone for personal reasons (e.g., wanting to help family and friends) vs. for work reasons (e.g., humanitarian-aid workers and journalists) and whose work-related injuries may be covered by riders and/or workers’ compensation;
C) Innocent civilians told to leave but who remained in Ukraine vs. those who left Ukraine — although it may be difficult or impossible to distinguish between those who remained because they simply wanted to do so from those who were unable to leave despite best efforts.
Simply put, it’s complicated.
Payers should revisit their war exclusions, as well as related military exclusions and exclusions of care abroad, and make any necessary or desirable changes. And the world should give peace a chance.
No Comments