Jan. 25--Blue Cross and Blue Shield, the state's biggest health insurer, has systematically canceled family insurance policies it sold last month to gay and lesbian couples in North Carolina under the Affordable Care Act.
The insurer canceled policies of 20 couples -- some who were legally married in states that recognize gay marriage -- and encouraged them to reapply for separate insurance policies as unmarried individuals. The couples received calls from Blue Cross in mid-January, several weeks after they purchased their family health insurance, and were told their family coverage was invalid.
Blue Cross' strategy has stung same-sex couples and gay-rights advocates because the nonprofit insurer offers domestic partner benefits to its own employees. Blue Cross insurance plans offered by large companies in North Carolina also include health benefits for employees and their same-sex partner.
"I was so taken aback by it; I was speechless," said Al Hinman, who moved with his husband to Durham from New York last year. "It was wrong, and it shouldn't have happened that way. For 24 years we've been on the same insurance with a few gaps."
The problem is traced to boilerplate terminology in Blue Cross policies that define "spouse" as "opposite sex." North Carolina insurance law does not prohibit selling coverage to homosexual couples, but Blue Cross was legally bound by the restrictive contract language in its individual plans, said Kerry Hall, spokeswoman for the N.C. Department of Insurance.
There could be similar language embedded in insurance small print in other states, but North Carolina is the only state where cancellations of same-sex customers have surfaced so far, said Brian Moulton, legal director for Human Rights Campaign, a national gay-rights organization in Washington, D.C.
Blue Cross has vowed to update the archaic language in 2015. The company says it plans next year to offer the same insurance options to same-sex married couples and couples in domestic partnerships that are offered to everyone else.
Little financial impact
For most of the North Carolina couples affected by the recent cancellations, there is little or no financial consequence from the change from a single family policy to separate coverage. Hinman said the premium cost for him and David Whitley, his husband of 4 years, dropped by about $68 a month as a result of buying two separate policies.
But even as same-sex marriage gains wider social acceptance, Moulton said, the incident underscores the daily indignities that gay couples still experience, especially in states such as North Carolina that have not enacted laws against discrimination based on sexual orientation.
"It's not that they are locked out of insurance or that they will be denied subsidies," said Adam Linker if the N.C. Justice Center, a Raleigh public policy group. "It's just that, as in so many areas of life, a loving, married couple has to pretend to be strangers because of discriminatory laws and policies."
Blue Cross spokeswoman Michelle Douglas said the company has never offered domestic partner or same-sex health coverage on individual and small group policies in North Carolina. Blue Cross had intended to update its policy to include those offerings, but it postponed making the change in terminology as the company scrambled to get ready for what turned out to be a rocky rollout of subsidized insurance under the Affordable Care Act.
Douglas said the change would have affected billing, insurance cards and other calculations, and it required time for implementation and testing.
"We recognize and agree that the ability to purchase family coverage is important from a fairness standpoint," Douglas said. "The reason for the deferral was that there was no financial impact to most customers."
Coventry Health Care of the Carolinas, the only other insurer that sells subsidized coverage here under the Affordable Care Act, does not prevent same-sex couples from buying a family policy, said spokesman Walt Cherniak.
Tax status affected
Those affected by the Blue Cross cancellations included Erin Kimrey and Jen Snider of Hillsborough. The two women were married in Canada in 2004 and now have a 21-month-old son.
They had been insured separately by Blue Cross for years, and have since resubmitted separate applications, said Kimrey, 45, a stay-at-home-mom. She noted that Blue Cross has promised the couple uninterrupted coverage for January, despite the disruption.
"It's been a really stressful 10 days and a lot of time trying to sort it out," Kimrey said. "For us being told suddenly we have no insurance was a very stressful situation."
Thomas Hafke and Chad Higby of Aberdeen were married last October in Washington. Hafke, a waiter, and Higby, a bartender, were uninsured last year and are without insurance again after Blue Cross canceled their policy.
Hafke, 29, said applying as unmarried individuals would require the couple to file federal taxes separately rather than jointly, a change that would increase their federal income tax bill by more than $1,000 a year.
"I'm hoping someone can figure something out," Hafke said.
Hinman, of Durham, said he has made his peace with the situation in light of Blue Cross' pledge to make changes for next year.
"We'd like to go back and do things like everyone else and be a family," Hinman said. "This has certainly focused light on Blue Cross getting their act together, and that is definitely a positive."
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