Defendant contends that plaintiff is not entitled to reimbursement under its medical plans for costs which have already been paid by other insurance carriers. Relying on the exclusion and coordination of benefits clauses quoted above, defendant moves for summary judgment in its favor.
Plaintiff also moves for summary judgment in his favor. In a brief supporting his motion, plaintiff contends that he is entitled to recover the entire amount of his wife's medical costs according to the coverage clauses of the certificates and is not bound by the deductible, exclusion, or coordination of benefits clauses thereof. The insured is not bound by these clauses, plaintiff asserts, unless the insurer proves that the insured was aware of these limitations and the effect of the limitations was explained to him. Plaintiff also asserts that these clauses are unconscionable, ambiguous, and against public policy.
Under Pennsylvania law,
insurance contracts have been considered contracts of adhesion. Ordinarily, disputes as to such contracts are strictly construed against the insurer. Hionis v. Northern Mutual Insurance Company, 230 Pa.Super. 511, 327 A.2d 363 (1974); Eastcoast Equipment Company v. Maryland Casualty Company, 207 Pa.Super. 383, 218 A.2d 91 (1966).
When an insurer refuses payment based on an exclusion or limitation contained in a policy, his defense is an affirmative one. Weissman v. Prashker, 405 Pa. 226, 175 A.2d 63 (1961). Ordinarily, the insurer must establish the applicability of an exclusionary provision by proving that the "insured was aware of the exclusion or limitation and that the effect thereof was explained to him." Hionis, supra, 230 Pa.Super. at 517, 327 A.2d at 365.
This policy of strict construction against the insurer has been established because the insurer ordinarily prepares the policy for a purchaser who has no bargaining power and who must take it or leave it. Usually, the insured is concerned only with monetary benefits and places little emphasis on definitional clauses and exclusions. Hionis, supra, 230 Pa.Super. at 517, 327 A.2d 363.
In the present case, however, plaintiff obtained insurance through group policies issued to organizations. These organizations generally have more bargaining power than an individual has in negotiating for insurance coverage. The individual tends to rely on the organization to obtain the best coverage. Therefore, the need to protect the individual purchaser from overreaching by an insurance company is minimized. Hammel v. Equitable Life Assurance Society of the United States, Civil Action No. 77-1378 (W.D.Pa. August 9, 1978).
At the time plaintiff enrolled in the B'nai B'rith excess medical plan, he was insured under two other health plans. When plaintiff enrolled in the Zionist excess major medical plan, he also had Blue Cross/Blue Shield and Medicare. His wife was also entitled to Medicare coverage. Purchasing an excess health plan under these circumstances evidences the intention to expand coverage rather than duplicate it. See Miller v. Prudential Insurance Company of America, 239 Pa.Super. 467, 362 A.2d 1017 (1976).
Plaintiff was a lawyer when he first applied for the medical plans and when he received the certificates of insurance. The enrollment forms which plaintiff signed clearly indicate that he was applying for "EXCESS" medical plans. Furthermore, the advertising brochures which customarily accompany such enrollment forms contain language sufficient to put plaintiff on notice that the certificates and group policies would contain certain exclusionary and coordination of benefits clauses.
Plaintiff, we repeat, received two certificates evidencing coverage under the group policies. These certificates of insurance contained a clause excluding losses paid under Social Security Act (Health Insurance for the Aged) and also contained a coordination of benefits clause excluding losses paid by other medical plans. Plaintiff alleges that these clauses are ambiguous on their faces. We find, however, the clauses to be sufficiently clear and unambiguous to inform plaintiff that he might not have been entitled to a double recovery on his or his spouse's medical expenses.
Since plaintiff admits that he recovered all or nearly all of the medical costs from other sources, defendant moves for summary judgment in its favor on the basis of the clauses in the certificates and the policies themselves which limit a payment when medical expenses have already been paid by other insurers. A similar situation confronted the Superior Court in Miller v. Prudential Insurance Co., supra, where the insurance company's defense relied on the policy's coordination of benefits clause. The court stated:
"Because the appellant has already received full compensation for his medical expenses, it would be inequitable to require Prudential to demonstrate affirmatively that the insured was aware of the exception and had its effects explained to him. Under the circumstances of this case, such knowledge should be imputed to the appellant."
Id. 239 Pa.Super. 467 at 362 A.2d 1021. In light of Miller, we conclude that Continental Casualty Company need not prove affirmatively that plaintiff was aware of the limitations contained in the certificates and group policies.
Plaintiff also contends that the exceptions to payment asserted by the defendant should not be enforced because they are against public policy. The Pennsylvania Department of Insurance, however, specifically allows the use of the clauses in question:
"The following is a list of the maximum applicable exclusions which shall be permitted . . . :