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Trump Judge Writes Ruling Dismissing Claim against Insurance Company for Cutting Off Medical Coverage to Elderly Woman: Confirmed Judges, Confirmed Fears

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Confirmed Judges, Confirmed Fears” is a blog series documenting the harmful impact of President Trump’s judges on Americans’ rights and liberties. Cases in the series can be found by issue and by judge at this link.

Trump Sixth Circuit judge Chad Readler wrote a 2-1 ruling affirming a lower court’s dismissal of a claim by the daughter of a deceased elderly woman that her insurance company should not have cut off medical care coverage claiming that her coverage had expired. A judge appointed by President George W. Bush dissented and maintained that the majority was wrong and there should at least have been more discovery in the case. The August 2020 decision is O’Keeffe v. Continental Casualty Co.

 Prior to her death, Vivian O’Keeffe was insured under a policy providing long-term care and other benefits issued by Continental Casualty Co. (CNA).  The policy provided long-term care coverage at an appropriate facility for a maximum of six years, and also included an “alternative plan of care” (APC) benefit covering other care, such as Alzheimer’s care, which a policyholder like Ms. O’Keeffe could reach an agreement with CNA and medical professionals to receive, subject to any terms agreed upon and the maximum dollar benefit under the policy. The settlement of a lawsuit between policyholders and CNA contained other provisions relating to the dollar amount of APC benefits.

Ms. O’Keeffe received two years of long-term care coverage and then moved to another facility where she received APC benefits. After four years, CNA terminated her coverage completely, claiming that the six-year maximum applied to the combination of long-term care and APC benefits.  Through her daughter Kathleen, O’Keeffe sued and tried to bring a class action on behalf of other policyholders as well, contending that CNA was wrong and that the six-year maximum applied only to long term care, not to APC benefits. Vivian O’Keeffe died, and her daughter continued the litigation. A district court dismissed the case without any discovery and ruled for CNA.

O’Keeffe appealed, and Trump judge Readler wrote a 2-1 decision affirming the lower court.  Readler maintained that the “best reading” of the policy language combined with the litigation settlement was that all of O’Keeffe’s coverage benefits terminated after six years, including both long term care and APC benefits.

Judge Helene White, who was nominated by President George W. Bush, dissented. She explained that Readler’s opinion paid “only lip service” to the policy language, and that his conclusion was in fact “contrary” to it. She continued that the policy language clearly states that the six year limit applied specifically to long term care, and that there is “no reference” to a limitation period concerning APC coverage, which is explicitly included in the policy dollar limit. The litigation settlement agreement, she went on, also “does not say” that the six-year limit applies to APC coverage, as the majority ruled. Although the failure of the agreement to specify a time period left some “uncertainty,” she noted, such uncertainty is “not properly resolved by stretching the policy provisions to fill perceived gaps in the settlement agreement,” especially when the agreement “expressly preserves the policy language” and there had not yet been any discovery on the meaning of the settlement agreement and other issues. Judge White would have sent the case back to the lower court for such discovery.

As a result of Readler’s ruling, however, there will be no opportunity for Ms. O’Keeffe to try to prove her mother’s case. In addition, crucial medical coverage for her and other elderly policyholders will be cut off after six years, despite the lack of specific language in the policy to that effect.