The opinion of the court was delivered by: MCCUNE
Plaintiff, Seymour H. Weiss, brings these actions in assumpsit to recover medical benefits allegedly due under the terms of two medical insurance certificates issued by Continental Casualty Company, a subsidiary of CNA. These diversity actions are before us on cross-motions for summary judgment. We ordered consolidation pursuant to Rule 42 of the Federal Rules of Civil Procedure.
Seymour Weiss and his wife were covered by two Continental Casualty group medical policies, one issued to the Zionist Organization of America Trust and the other to B'nai B'rith. Plaintiff received certificates of insurance from Continental Casualty which detailed the extent of coverage under each of the policies. The Zionist certificate contained a $ 15,000 deductible clause and the B'nai B'rith certificate contained a $ 20,000 deductible clause. Both certificates, and the corresponding group policies, also contained the following clauses:
EXCLUSIONS AND REDUCTIONS
The policy does not cover any loss caused by or resulting from . . . care or treatment of the Insured Person to the extent that benefits are paid or payable therefore under Title XVIII of the Social Security Act as enacted in 1965 and entitled "Health Insurance for the Aged' or as subsequently amended . . . .
CO-ORDINATION OF BENEFITS
(T)his Plan's benefits shall be reduced so that its reduced benefits, plus all benefits payable under all other Plans for those same expenses, equal the total of those expenses.
Plaintiff seeks to recover approximately $ 25,000 in medical costs incurred during an illness of his wife prior to her death. Plaintiff admits, however, that all of the medical costs have been paid by Medicare and Blue Cross/Blue Shield with the exception of $ 407.00 and certain nurses' charges. Plaintiff further admits that all or part of the excepted amount may have been paid by other insurance plans.
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. ...