Health Plan for Potential AIDS Victims OKd by State

The California Department of Insurance Monday approved a Santa Monica insurance company’s application to sell the first medical insurance in the state designed specifically for potential AIDS victims.

Coastal Insurance Co. issued 50 AIDS medical expense policies by the end of the day Tuesday, according to James Hotinger, a vice president with the company. The policies were sold to men throughout the state, although most were sent by mail to the Los Angeles, San Diego and San Francisco areas.

The policy, with a yearly premium of $194, will pay up to $64,000 in the first year of treatment for acquired immune deficiency syndrome, a condition that destroys part of the immune system and leaves the body vulnerable to infection. Homosexual men are the most frequent victims of the disease.

Only one other company in the country, Provident American Insurance of Dallas, is known to sell an AIDS policy.

Concerns on Premium

The state approved the sale of policies by the Santa Monica firm despite concerns about whether the premium is high enough to cover claims and despite statements from some officials in the insurance department that the coverage is probably not needed by those who have comprehensive group or individual health insurance.

The state agency has no power to set rates for insurance and had no way to prove that the $194 premium was insufficient, so it approved the policy, according to Joe Powers, an attorney with the department.

Another agency official said those who consider buying the policy should make sure that it does not duplicate any insurance they already have. “Basically much of what your health-care plan offers is already covering (AIDS),” said Jorge Sandoval. “What the consumer should ask is what they are really getting for their money.”

Coastal Insurance officials said the policy should be used as a supplement to comprehensive health-care policies. Deductibles and other limits in most insurance policies will be covered by Coastal, according to company president William Fralick.

Benefits Listed

Benefits include $100 per day during the first 60 days in the hospital, $150 per day for the next 60 days of hospitalization and $200 per day for the duration of the hospital stay. Up to $5,000 per year also will be paid for expenses such as doctor bills and testing.

All payments will be made directly to the patient so that the money can be used to pay for daily expenses such as rent and car payments. This is important to many AIDS victims who lose their jobs when they develop the disease, according to Larry Sprenger, an insurance consultant and co-chairman of the Municipal Elections Committee of Los Angeles, the city’s largest gay political group.

Coastal has received about 325 inquiries since it first advertised the policy in a gay newspaper last month, and about 15 calls per day are coming in, Hotinger said.

The first 50 policies were written and ready to be mailed, when the state granted its approval Monday, he said. About 15 others are still being reviewed, some of which were held up because the applicants admitted to symptoms associated with AIDS. The company will not issue policies to people who already have AIDS. Those applicants who have symptoms of the disease must submit to a careful medical examination before the company will consider granting them a policy.

Coastal plans to file applications to sell the policy in Nevada, Arizona and Washington, according to Hotinger.