Schmitt v. Kaiser Foundation Health Plan of Washington, No. 18-35846 (9th Cir. 2020)Annotate this Case
Plaintiffs, who have hearing loss severe enough to qualify them as disabled, filed suit claiming that Kaiser's health insurance plan's categorical exclusion of most hearing loss treatment discriminates against hearing disabled people in violation of Section 1557 of the Patient Protection and Affordable Care Act (ACA). The district court ruled that Kaiser's plans do not exclude benefits based on disability because the plans treat individuals with hearing loss alike, regardless of whether their hearing loss is disabling.
The Ninth Circuit agreed with the district court that plaintiffs have failed to state a plausible discrimination claim. The panel explained that the ACA specifically prohibits discrimination in plan benefit design, and a categorical exclusion of treatment for hearing loss would raise an inference of discrimination against hearing disabled people notwithstanding that it would also adversely affect individuals with non-disabling hearing loss. However, the exclusion in this case is not categorical. The panel stated that, while Kaiser's coverage of cochlear implants is inadequate to serve plaintiffs' health needs, it may adequately serve the needs of hearing disabled people as a group. Therefore, the panel affirmed the district court's dismissal of the second amended complaint. The panel reversed the district court's dismissal without leave to amend and remanded.