Appleman v. National-Ben Franklin Insurance of Illinois

Opinion

BROWN (Gerald), P. J.

John Alan Appleman appeals the summary judgment entered on the motion of National-Ben Franklin Insurance Company of Illinois (Company) which foreclosed his suit for hospitalization benefits.

[1014]

Appleman underwent cancer surgery and incurred hospital expenses of $3,038.65. On receiving the bill for hospitalization, Company refused to pay saying those expenses were “not actually incurred” or Appleman was “not required to pay” because these charges were paid by Medicare.

The question here concerns how Medicare Part A payments are to be treated. The pertinent parts of the insurance contract with Company read:

“No indemnity shall be payable under this policy with respect to such medical expense incurred; ....

“(i) for which the Insured, or the eligible members of the Insured’s family, is not required to pay.”

Appleman says he relied on the brochure in buying Company’s insurance and the brochure said:

“No proration because of other insurance.

“This is ideal basic or supplementary insurance to any existing Hospital Plan.”

He points out that if these hospital costs had been paid by Blue Cross or a like insurer, Company would have paid the bill again. Appleman argues that payments from Medicare are no different.

Only a few cases have addressed the question of Medicare Plan A benefits. Appleman cites us to two:

Black

v.

American Bankers Insurance Company

(Texas) 478 S.W.2d 434; and

Niles

v.

American Bankers Insurance Company

(La.App.) 229 So.2d 435. Both of these cases deal only with whether a patient under Medicare “actually incurs expenses,” and do not treat the requirement to pay feature. The argument is that because the hospital must agree not to charge the patient for services paid by the federal government