                         January 15, 1987




Mr. Lyndon L. Olson, Jr.           Opinion No. m-621
Chairman
 State Board of Insurance          Re: Claims for loss or impairment
 1110 San Jacinto Boulevard        of speech or hearing under article
 Austin. Texas   78701             3.70-2(G) of the Insurance Code

Dear Mr. Olson:

     You have asked numerous questions about the construction of
article 3.70-2(G) of the Insurance Code, which provides:

             Insurers, nonprofit hospital      and medical
          service plan corporations subject to Chapter 20 of,
          this code, and health maintenance organizations
          transacting health insurance or providing other
          health coverage in this state shall offer and make
          available, under group policies, contracts, and
          plans providing ~hospital and medical coverage on
          an expense incurred. service or prepaid basis,
          benefits for the necessary care and treatment of
          loss or impairment of speech or hearing that are
          not less favorable than for physical illness
          generally, subject to the same durational limits,
          dollar   limits, deductibles, and      coinsurance
          factors. Such offer of benefits shall be subject
          to the right of the group policy or contract
          holder to reject the coverage or to select any
          alternative level of benefits if such right is
          offered by or negotiated with such insurer,
          service plan corporation, or health maintenance
          organization. (Emphasis added.)

     Initially, we note that the language of this provision is
exceedingly difficult to construe in a manner that makes sense. We
believe that the legislature should address itself to amending it in
its next regular session. The phrase “to select any alternative level
of benefits if such right is offered by or negotiated with such
insurer” has given rise to difficult questions of interpretation. You
inform us that some insurers have construed that phrase to give the
insurer the option of providing coverage of certain speech and hearing
disabilities and not others. Specifically, some insurers have refused




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Mr. Lyndon L. Olson, Jr. - Page 2    (JM-621)




to cover treatment for loss or impairment of speech or hearing if th,e
loss or impairment is a birth defect or developmental problem rather
than a condition secondary to another illness or injury. You have
asked us to determine what is meant by the phrase "alternate level of
benefits" in article ,3.70-2(G).

     Article 3.70-2(G) requires insurers that provide health coverage
in Texas to offer plans providing "benefits for the necessary care and
treatment of loss or impairment of speech or hearing that are not less
favorable than for physical illness generally." That phrase requires
an offer of coverage for loss or impairment of speech or hearing; it
does not authorize an initial offer limiting coverage to certain types
of speech or hearing problems. Therefore, the initial offer must
include benefits for treatment of speech and hearing problems, regard-
less of the cause of such problems, and those benefits must be as
favorable as benefits for physical illness generally. See Attorney
General Opinion JM-5 (1983). Article 3.70-2(G) also allowsthe insured
to reject coverage for speech and hearing problems altogether. What
the statute does not make clear is whether, once the initial offer is
rejected, the insurer may offer coverage for loss or impairment of
speech or hearing from certain causes and not others. Although the
meaning of the phrase is obscure, we think that because the legisla-
ture chose the phrase "alternate level of benefits" .rather than
"alternate coverage," an insurer may not offer or issue a plan that
covers only certain types of speech and hearing problems and not
others. In other words, the insured and insurer may negotiate about
dollar limits, deductibles, and other benefits, but they may not cover
some hearing problems and exclude fr& coverage speech and hearing
problems that stem from certain causes.

                             SUMMARY

             Under article 3.70-2(G), an insurer may not
          offer or issue a plan that covers only certain
          types of speech and hearing problems and not
          others.




                                         JIM     MATTOX
                                         Attorney General of Texas

JACK HIGHTOWER
First Assistant Attorney General

MARY KELLER
Executive Assistant Attorney General




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Mr. Lyndon L. Olson, Jr. - Paw    3   (JM-621)




RICK GILPIN
Chairman. Opinion Committee

Prepared by Tony Guillory and
Sarah Woelk
Assistant Attorneys General




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