Blue Cross Blue Shield Faces Legal Battle Over Discrimination Claims

Understanding the Blue Cross Blue Shield lawsuit in Illinois

Wallace Miller attorneys are representing an Illinois woman in a proposed class action alleging discrimination by Blue Cross Blue Shield (BCBS) based on sexual orientation. The lawsuit centers on the insurer’s fertility treatment coverage policy and may have far-reaching ramifications for interpretations of healthcare policy. 

Reviewed by Julia Ozello.

Timeline

November 2023-present: The plaintiff has been continuing the discovery process to investigate the alleged wrongful conduct and determine how many LGBTQ+ individuals were affected by BCBS’s discriminatory practices. 

October 2023 – Federal Judge LaShonda A. Hunt denies BCBS’s motion to dismiss, allowing the case to proceed. 

August 2022 – BCBS files a motion to dismiss the plaintiff’s complaint. 

May 2022 – In Murphy v. Health Care Service Corp, plaintiff Kelsey Murphy and the team at Wallace Miller file a potential class action against BCBS alleging discrimination based on sexual orientation. 

Fall 2020 – The plaintiff begins IVF treatment. She was later told by her doctor that BCBS had denied coverage and charged out-of-pocket costs of more than $10,000. 

2014 – The plaintiff initially purchases a health insurance policy from BCBS that includes fertility coverage.

What is the Blue Cross policy for fertility treatment coverage?

Under the plaintiff’s BCBS health care insurance plan, individuals looking to start a family may qualify for fertility coverage if they can prove “the diagnosis and/or treatment of infertility.” The policy outlines several ways of proving infertility, notably being unable to conceive after engaging in a year of unprotected sex. 

The policy’s definition specifically classifies unprotected sex as sex between a man and a woman. As a result, someone in a heterosexual relationship is able to prove eligibility for the fertility plan after a year without taking on additional costs—while non-heterosexual women and single people trying to bear children can only meet the coverage requirement through expensive tests. 

Banning discriminatory coverage under the ACA

The Affordable Care Act sets out several prohibitions on discrimination in healthcare policies. Specifically, Section 1557 states that healthcare organizations may not discriminate based on characteristics like sexual orientation that are protected by other civil rights statutes.

The plaintiff in this case alleges that BCBS’s fertility coverage policy therefore violates the ACA. Non-heterosexual individuals trying to conceive are required to undergo expensive supervised medical tests and contraception methods in order to prove eligibility. In effect, the policy imposes additional out-of-pocket costs on LGBTQ+ participants that heterosexual members do not need to pay. 

The interpretation of Section 1557 of the ACA has been the topic of extensive debate. This litigation—which was recently given the green light to continue by an Illinois district judge—will likely have far-reaching ramifications on its implementation for years to come. 

Fighting for equal rights

Plaintiff Kelsey Murphy initially tried to conceive with her partner in 2020. She began in vitro fertilization (IVF) treatments in the fall but was later informed by her doctor that Blue Cross had denied her coverage due to her not meeting infertility criteria. Without coverage, the out-of-pocket costs already came to more than $10,000 and the plaintiff decided not to continue IVF at that time. 

BCBS denied the plaintiff’s insurance claim in 2020 because she didn’t meet the policy requirement of having one year of heterosexual sex without conception. To obtain IVF treatment, she would need to pay out of pocket for medical procedures —something a heterosexual woman trying to conceive would not need to do under BCBS’s policy. 

The plaintiff claims that BCBS’s policy essentially sets an illegal burden on LGBTQ people, demanding that they pay for expensive fertility treatments out-of-pocket if they want to start a family. The class action, filed in the Northern District of Illinois, seeks to represent all individuals covered under Blue Cross policies who have been denied fertility treatment coverage due to their sexual orientation or gender identity. 

New ruling allows case to continue in district court

In August 2022, BCBS filed a motion to dismiss the plaintiff’s case, claiming that LGBTQ+ couples can qualify for the fertility policy in other ways. However, in October 2023, the federal court denied BCBS’s motion and ruled that the lawsuit could proceed. U.S. District Judge LaShonda A. Hunt disputed Blue Cross’s claim that non-heterosexual couples had equivalent methods of qualifying for coverage—instead, she said, these couples had to take on significant expenses for the same policy benefits. 

In her dismissal, the federal judge ruled that BCBS may have denied coverage under an unlawfully discriminatory policy. This groundbreaking new ruling not only allows the lawsuit to proceed, but potentially sets up a new interpretation of the ACA’s anti-discrimination provisions. 

Wallace Miller is fighting for equal access to fertility treatment

The attorneys at Wallace Miller are proud to fight against discriminatory policies for equal access to healthcare. We work hard to achieve the best outcome for our clients and to leave a lasting positive impact on the interpretation and implementation of crucial legislation. If you were denied fertility treatment coverage due to gender identity or sexual orientation, we may be able to help. Reach out to our office at [phone] for a free and confidential conversation about your potential case.