Insurers Try to Screen Out AIDS Cases : Some Carriers Begin Requiring Applicants to Take Blood Tests

Some health and life insurers, reflecting concern that AIDS will cost the insurance industry billions of dollars in death benefits, are beginning to screen policy applicants to weed out likely victims of the deadly virus.

Los Angeles-based Transamerica Occidental Life Insurance Co. said Thursday that it began on Oct. 1 blood tests designed to detect AIDS carriers. The medical screening order went out after the company discovered that it had paid $2.5 million in death benefits in about 20 AIDS cases.

While insurance companies have always taken detailed medical histories and often have required physical examinations before issuing policies, some are now adding specific questions related to AIDS.

High Proportion

Industry officials, in recognition of the subject’s sensitivity, emphasize that no applicant group is being singled out. AIDS victims include a high proportion of homosexual males, intravenous drug users and hemophiliacs but also a rising percentage of heterosexual males and females.

In a statement explaining the company’s new policy regarding AIDS, David R. Carpenter, chairman, president and chief executive of Transamerica, acknowledged the potential controversy of such testing. He said that, although insurers must protect themselves from abnormal losses, “we also are obliged--profoundly so--to offer the protection of life and health insurance to all who seek it.”

This means “scrupulously fair testing practices which will not exclude any person because of sexual preference or any other factors not related to established underwriting principles,” Carpenter said.

Terry Leedom, a spokesman for Lincoln National Life Insurance, one of the insurers now screening applicants, said: “Seventy to 75% of all AIDS victims are homosexual or bisexual males, but we understand fully that not all unmarried males in that age group of 20 to 49 are homosexuals, that not all AIDS victims are homosexuals and that not all homosexuals get AIDS.

“And most of all,” he emphasized, “we are not discriminating against homosexuals. Being homosexual is no basis for not underwriting insurance.”

However, last summer, Lincoln National, which is headquartered in Fort Wayne, Ind., sent a memorandum recommending that life styles and habits of life insurance applicants be considered by the nearly 700 insurance companies that it presently reinsures (that is, assumes part of their insured risk). The memo advised that, if an applicant’s life style fits the AIDS-prone profile, it should not constitute grounds for rejection but rather should trigger further inquiry.

Question Raised

Policy writers also were told to question applications from single males for policies with unusually large benefits payable to his parents or to another male at his address, Leedom said. “That would certainly raise questions,” he said.

The memo also outlined medical symptoms and previous conditions that either would be grounds for rejection or ordering additional tests.

The AIDS virus so far has struck 13,611 persons throughout the county, claiming 6,944 lives, according the the Centers for Disease Control in Atlanta. AIDS cripples the immune system, leaving the victim vulnerable to infections and other diseases, such as cancer. Its virus can be transmitted, apparently, through sexual contact, contaminated needles and blood transfusions but not through casual contact, according to the Atlanta research institute. There is no known cure.

‘Can’t Inquire’

Insurers plainly will be treading a fine line, according to an official with the California Department of Insurance. “You can’t inquire into someone’s sex life,” said Peter Groom, chief of policy approvals for the agency. “If we were made aware of life insurance applications that asked specific questions about a person’s life style or who they went to bed with, we might have some objections.”

However, he added: “We certainly feel that an insurer is under no more compulsion to insure someone with AIDS than with any other life-threatening illness. We don’t require insurers to cover someone who has cancer.

“But what we are concerned about,” Groom said, “is insurers turning down people who do not have AIDS simply on the basis of some general perceptions about how the people in certain parts of town or with certain life styles live their lives.”

On the other hand, he said, insurers have long been able to inquire about sexually transmitted diseases. That would include a history of AIDS. Thus, Groom said, the state agency has not opposed a number of requests during the last few months by companies inserting medical questions relating to AIDS in their applications. (The state must approve health insurance applications but not life insurance applications, he said.)

“I would expect it to become a common question in detailed medical applications,” Groom said.

Frowned Upon

While it is “a possibility” that, as a group, young single males could eventually face an AIDS-inspired higher premium, he said, it would have to be tied to more than life style. “We would frown very much on any rating program that provided that males in that age range would pay more than others because they happened to live” in a predominantly gay neighborhood.

Transamerica Occidental Life routinely requires a series of blood tests for persons of whatever age or sex who apply for what the insurer considers a “large amount” of coverage.

The level considered significantly large can range, according to age, from $100,000 to $500,000, said David E. Gooding, senior vice president for corporate marketing.

“Where we’re already drawing blood routinely in the course of a medical exam, we’re adding to that a test for AIDS,” Gooding said.

The federally approved blood test, called ELISA, reveals the presence of AIDS antibodies. Transamerica is administering the tests to its applicants only in those states, Gooding said, which have been identified by the Centers for Disease Control as having the heaviest concentrations of AIDS cases: New Jersey, the District of Columbia, Florida, Illinois and Texas. The company doesn’t do business in New York, another state identified as having a high concentration of AIDS cases.

In California--also on the list--a new state law prohibits insurers and employers from testing for AIDS antibodies. So Transamerica is using a more generalized blood test, called a T-Cell Suppressor Test. This checks a body’s immunity system.

The California Health and Safety Code (Section 199.21f) states: “The results of a blood test to detect antibodies to the probable causative agent of Acquired Immune Deficiency Syndrome shall not be used in any instance for the determination of insurability or suitability for employment.” Wisconsin has a similar law.