Women holding drinks and talking


Jason Cornell Jan. 12, 2019

Health insurance policies are contracts which spell out the rights and obligations of the parties. These policies are designed to pay for medical expenses as provided for under the policy, however, policies also contain exclusions which can limit the scope of coverage. Sometimes health insurers improperly deny coverage for an otherwise covered medical claim, arguing that the denied claim is excluded under the policy. If the health insurer denies a claim which should otherwise be covered either under the express terms of the policy, or pursuant to state or federal law, the insurer may be in breach of the terms of the policy and liable for damages.

In 2001, Florida’s Second District Court of Appeal addressed whether a health insurer, Blue Cross and Blue Shield of Florida (“Blue Cross”) was in breach of contract for denying a health insurance claim for medical expenses.  See Blue Cross and Blue Shield of Florida, Inc. v. Steck, 778 So.2d 374 (Fla. 2d DCA 2001).  The insured in that case, Angela Steck, was allegedly injured while intoxicated.  According to facts stipulated by the parties, Ms. Steck attempted to cross a street and was struck by an oncoming vehicle. She was hospitalized for fifty-three (53) days and incurred over $350,000 in medical bills.  Id. at 375.

Ms. Steck’s health insurance policy contained an exclusion providing that the policy does not cover injuries “for a condition resulting from you being drunk …”  Based on this exclusion, Blue Cross denied coverage for Ms. Steck’s medical expenses. During the course of the litigation, the trial court found that the language in the policy, according to prior Florida case law, covered Ms. Steck’s hospital and medical expenses for injuries she sustained while intoxicated.  Blue Cross appealed the trial court’s decision.

On appeal, the Second District agreed with the trial court and found that the exclusion did not apply to Ms. Steck’s medical bills.  The trial court, in ruling against Blue Cross, relied in part on the 1949 Florida Supreme Court decision of Mason v. Life & Casualty Ins. Co. of Tenn., 41 So.2d 155 (Fla. 1949)(commonly referred to as the Mason II decision).  Like in the present case, the insurance policy in Mason II contained an intoxication exclusion.  There the Florida Supreme Court recognized two types of injuries due to intoxication – direct injury (i.e. liver failure) and indirect injury (i.e. being drunk and subsequently hurting yourself).  The court in Mason II found that the insurance company failed to show that the injury was the direct result of intoxication.  Id. at 376.  

Applying Mason II to Ms. Steck’s case, the Second District held that the exclusion in Ms. Steck’s policy did not exclude medical expenses which were an indirect result of intoxication.  The court reminded readers that exclusions in insurance policies must be “construed liberally in favor of the insured and strictly against the insurer who prepared the policy.”  Id. at 376.  

The Steck decision should not be read to mean all injuries indirectly caused by intoxication are covered by health insurance policies.  Steck was the product of the language in that particular Blue Cross policy.  Compare, for example, Harris v. Carolina Life Ins. Co., 233 So.2d 833, 834 (Fla. 1970), where the exclusion did apply to injuries directly and indirectly related to intoxication.  Id.  at 377.  In his concurrence in Steck, Judge Altenbernd noted that although Fla. Stat. §627.629 permits an exclusion for “loss resulting from the insured being drunk ..,” Judge Altenbrand believes Mason II and similar decisions limit such an exclusion to apply only to direct injuries.  Id. at 377.