545 N.E.2d 930 | Ohio Ct. App. | 1989
This is an appeal from the New Philadelphia Municipal Court judgment entered in favor of defendant-appellee, Hospital Care Corporation ("HCC"), against plaintiff-appellant, Margaret A. Goshorn ("appellant"), dismissing the complaint with prejudice.
Appellant assigns two errors:
Appellant had purchased a hospital care contract from HCC effective May 1, 1983. This was a Blue Cross contract, similar to health insurance, but subject to different regulations.1
Appellant was admitted to Huron Road Hospital on May 17, 1983, and discharged on May 18, 1983. She was diagnosed and treated for a prolapse of the posterior leaflet of the mitral valve, which was shown to be a congenital condition. Appellant had no previous knowledge of this condition, and the symptoms first became manifest at the time of this hospitalization.2 *48
HCC denied coverage of medical expenses for this condition claiming that because appellant's congenital condition existed from birth, it was excluded from coverage by the pre-existing condition provision of the contract.
"Pre-existing conditions — A pre-existing condition (including maternity) which exists on the effective date of this coverage. We will not pay the expenses for a pre-existing condition which are incurred during the first 12 months of this coverage."
Appellant contends that in order to give reasonable effect to this provision, a condition must be considered to exist when it first becomes manifest by symptoms, that is, when the sufferer knows or becomes aware of the condition. HCC urges that to do so would be to disregard the clear meaning and introduce unintended terms into the provision. This conflict can be resolved by looking to the purpose of insurance contracts, and of this type of exclusion provision.
The HCC contract is similar to insurance in that it serves to pool the funds (premiums) and distribute risk among the subscribers. By a system of shared risk, an individual subscriber is protected from the expense of unanticipated loss (illness or injury), i.e., protected from the unknown. Implicit in this system is the understanding that the pool (HCC) should be able to insulate itself from known expenses. This is accomplished by means of exclusionary provisions.
The purpose of the contract provision, from the perspective of the subscriber, is to provide notice that certain expenses will not be covered. This notice fails if the provision is construed so as to exclude an unknown condition, i.e., one which has not manifested symptoms.
Where a policy of insurance prepared by an insurer provides generally for certain coverage, exclusions from such coverage must be expressly provided for or must arise by necessary implication from the words used in the policy. Butche v. OhioCas. Ins. Co. (1962),
We hold that the pre-existing condition exclusion in the HCC contract did not apply to appellant's congenital condition. The mitral valve prolapse existed as an anatomical peculiarity from birth, but did not exist as a medical condition until appellant's hospital admission, May 17, 1983.
The first assignment of error is sustained.
The second assignment of error is overruled.
Having sustained the first assignment of error, we reverse the judgment of the trial court and remand to that court for further proceedings consistent with this opinion.
Judgment reversed and cause remanded.
PUTMAN, P.J., and HOFFMAN, J., concur.