US Court ruling “Bipolar Disorder is physical disorder and not a mental illness”
Implications for discrimination by insurers against mental health problem
This case revolves around the increasing and incontrovertible evidence from various areas of research that bipolar disorder is not ‘merely’ a ‘psychological disorder
It has reluctantly been accepted by individuals suffering from bipolar disorder (manic-depressive illness) and other mental health disorders that they face problems with regard to insurance of all types. Life insurance, personal income insurance and motor insurance are all affected by history of pre-existing ill health of any type but some policies specifically exclude cover for the de-novo development of ‘mental illness’ during the term of the policy, treating it differently from ‘physical disorders”, as well as imposing larger premiums or imposing other limitations on people with known mental health problems.
A court ruling on this issue in the US which is of considerable significance in this area has not been picked up at all by the popular media or the professional literature either within or outside of the US. Although not of direct legal impact outside of the US, we believe this case raises important issues about the way both employers and insurers deal with claims arising from the development of mental health problems. It also raises more general issues regarding differential stigma of ‘mental’ versus ‘physical’ ill health. This case revolves around the increasing and incontrovertible evidence from various areas of research that bipolar disorder is not ‘merely’ a ‘psychological disorder’.
The Case: Fitts v. Fannie Mae
The ruling by the United States District Court for the District of Columbia involves an employee of a major mortgage company who developed bipolar disorder and whose employee disability insurance provider stopped paying disability benefits after 24 months on the grounds of bipolar disorder being a ‘mental illness’. The policy provided cover until the age of 65 for physical disability.
Ms. Fitts had worked for the company for 13 years before she was first diagnosed with bipolar disorder in 1995. The employee- Ms. Jane Fitts, successfully brought a case against both the employer and the insurer arguing that bipolar disorder did not clearly fall in the category “mental, emotional or nervous diseases or disorders of any type”. The court awarded “prejudgment interest on all sums due her and the costs of this action “.
Three pieces of evidence were presented to back this argument, and two expert witnesses, including Miss. Fitts’ own psychiatrist, provided evidence:
1. Ms. Fitts’ father and brother showed symptoms of the disorder and so a hereditary predisposition coupled with having the disorder showed the genetic nature of the disorder, which must therefore have a physical basis.
2. Brain scans of Ms. Fitts showed excessive age-controlled atrophy of the left parietal lobe and abnormal wave activity on the left side of the brain.
3. Ms. Fitts suffered from physical symptoms such as headaches, chest pains, and insomnia that were ascribed to bipolar disorder.
Prof. Frederick T. Goodwin from the George Washington School of Medicine stated: “bipolar disorder is a physical illness because it is a neurobiological disorder that affects the physical and chemical structure of the brain”. He supported the claims listed above, also making the point that susceptibility to pharmacological therapy suggest a physical cause. Ms.Fitts’ psychiatrist maintained that while the clinical features of the disorder are mainly behavioural and emotional, they are due to physical changes in the brain.
Ms.Fitts’ psychiatrist maintained that while the clinical features of the disorder are mainly behavioural and emotional, they are due to physical changes in the brain.
The defence team argued that bipolar disorder clearly falls within the “mental illness” category because previous judgments had ruled it to be such on the manifestation of the symptoms and because it appears in DSM-IV.
This case was an appeal on a previous judgement against Ms. Fitts’s claim. The first filing of the suit focussed on violation of the Americans with Disabilities Act (ADA) and the District of Columbia Human Rights Act (DCHRA), and breached certain contractual and common law duties. This court dismissed all of Ms. Fitts’ claims except her Employment Retirement Income Security Act (ERISA) claim. ERISA requires all policies to be written in unambiguous language and given that bipolar disorder did not clearly fall within the definition of mental illness in the insurance policy, the court was bound by the doctrine of contra preferentem, which has been applied as federal common law to ERISA. The doctrine states that in ambiguous definitions the ruling should be against the drafter of the contract.
Another case ongoing in North America illustrates the unfortunate consequences of stigmatisation of bipolar disorder leading to an understandable reluctance by those affected to openly disclose to employers a history of pre-existing mental illness. The Canadian insurers of the television series The Dead Zone filed a suit against star Anthony Michael Hall to recoup more than $612,000 for failure to disclose he suffered from bipolar disorder, AP reports. The suit claimed production of the series, shot in Vancouver, was halted from May to August 2001 when Hall was treated for “bipolar affective disorder depression with psychotic features” for which the production company submitted a claim and received money. The case is waiting to be heard at The Supreme Court of British Columbia. (Source: Vancouver Sun)
In a case in New York, which does not have parity legislation, a court ruled that a disability insurance policy is not discriminatory because it provided only 24 months of cover for disability due to unipolar depression, rather than cover to the age of 65 years as it would have done for disability due to physical injury. The appellant, a Charlene Polon, continued to suffer with unipolar depression and has not been able to claim disability allowance under her policy from 1996. The case was made under the Insurance Law, and the court ruled that the law only protected from discrimination “with regard to her eligibility for and access to insurance” and not within the terms of the policy. This case demonstrates that many instances of discrimination continue to occur and that even the covering statutes are unclear.
What is a “mental disorder”?
From a legal standpoint, the main question for the court is often one about the type of approach to the disorder. For example, bipolar disorder could be seen as primarily an emotional and behavioural disorder if interpreted mainly by its symptoms. On the other hand, as was shown in Ms. Fitts’ case, the underlying pathology of a behavioural disorder lies within a physical organ, and so causality seems to point to definite physical processes that underlie the symptoms. The line separating “mental” and physical” becomes rather blurred with this approach, as our understanding of electrophysiology and molecular genetics shows that the basic processes underlying brain function are much the same as those in the heart, the peripheral nerves, or the gut. The final approach is based on therapy, so that “mental illness” is defined as being treated with psychotherapy or psychotropic medication. The distinction probably stems from the historical schism in the practice of neurology and psychiatry, and seems jaded in light of contemporary evidence. Even Freud said: “the deficiencies in our description would presumably vanish if we were already in a position to replace psychological terms by physiological and chemical ones.”
The defining documents of psychiatric disease are the Diagnostic and Statistical Manual of Mental Disorders (DSM-IV) (more often used? in the US) and International Statistical Classification of Diseases and Related Health Problems, Tenth Revision (ICD-10). These are documents that include all recognised psychiatric diagnoses. The DSM-IV defines a mental disorder as “a clinically significant behavioural or psychological syndrome or pattern that occurs in an individual and that is associated with present distress (a painful symptom) or disability (impairment in one or more important areas of functioning) or with a significantly increased risk of suffering death, pain or disability. In addition, this syndrome or pattern must not be merely an expectable and culturally sanctioned response to a particular event, e.g.the death of a loved one.
Whatever its original cause, it must currently be considered a manifestation of a behavioural, psychological or biological dysfunction in the individual. Neither deviant behaviour, e.g., political, religious, or sexual, nor conflicts that are primarily between the individual and society are mental disorders unless the deviance or conflict is a symptom of a dysfunction in the individual, as described above.” The manual itself states that mental disorder can be due to a biological, i.e. physical dysfunction.
As there are significant biological factors mediating genetic susceptibility to bipolar disorder and many other ‘mental illnesses’ (for example schizophrenia), the Cartesian dualism of ‘organic’ versus ‘functional or non-organic” mental disorders needs to be challenged. This is vital if there is to be further advancement of the struggle against both stigmatisation by the public and the wider medical profession. We await with hope and interest legal challenge in this area outside the US and specifically in the UK and EU. The paradox is that it is in the interests of both those affected by mental illness and insurers that there is early diagnosis and treatment of these disorders, leading to improved treatment outcome and long-term prognosis, and decreasing the likelihood of functional disability.
Legislation or procrastination?
There are currently full mental health parity laws in 15 states of the USA. There is also federal legislation, The Mental Health Parity Act 1996, that disallowed annual or lifetime dollar caps on mental health care that were different from medical or surgical care. Insurance companies, have, however, circumvented this legislation by finding ways of increasing costs for mental illness relative to physical illness. For example, fewer hospital days may be covered, or the patient may have to face higher cost-sharing. New legislation has been drafted that would require parity for mental illness. This is The Mental Health Equitable Treatment Act (MHETA), which has been read before the Senate and House of Representatives several times, but has not passed. This act would require any mental disorder covered by an insurance policy to have equivalent coverage as any medical or surgical disorder. It would not require any policy to cover mental illness per se, only parity if it was included in the policy.
There is considerable opposition to this legislation from lobbying groups representing insurance companies, and businesses that provide insurance cover for their employees. This is mainly on the grounds of increased cost, which it is argued would lead to less comprehensive insurance coverage. This argument is supported by evidence of increasing premiums for employers and insurers providing full parity insurance, and by the fear that legislation would be exploited by claims against insurers for entities such as “jet-lag disorder” that are included in the DSM-IV. The opposing argument is that the cost to productivity of mental illness is much greater than the cost of providing effective coverage for mental illness, and that the legislation includes provisos safeguarding insurers from claims that are unfounded in terms of disability. The fact that similar legislation is operational in many states of the USA seems to support the viability of such legislation, besides the point of principle against discrimination of “mental illness”.
What is the cost of mental illness as compared to the cost of full parity?
The WHO Global Burden of Disease study estimated that mental illness contributes 15% of the total burden in developed market economies. Unipolar depression will be in second place by 2020 (see table 1), while other disorders such as bipolar disorder and schizophrenia are also considered to be increasingly relevant in the total burden of disability. Disability requires health care and decreases participation of the affected individual. The National Association of Mental Illness (USA) estimates that untreated mental illness costs $113 billion per year. Successful treatment of a body dysfunction can lead to an increased quality of life for that person and increase their participation in society, which includes economic productivity.
“Mental disorders” such as unipolar depression and schizophrenia can be successfully treated and the rates of success are perhaps even greater than those for “physical illness” such as ischaemic heart disease. The onset of “mental disorders” is also usually at a younger age and so successful control of symptoms can provide increased confidence and concordance with treatment, as well as allowing the individual to fulfil their potential.
The restriction of treatment for disease that has a poor prognosis and for which treatment is available seems nonsensical and verges on the negligent from a medico-legal perspective. The Congressional Budget Office in the USA looked at the possible cost of MHETA. It estimated that premiums of group health insurance would increase by an average of 0.9%. This figure is an estimate of the direct costs of the Act. It has been argued by proponents that this extra cost would be easily offset by the increase in productivity gained by adequately treating mental illness.
The situation in the United Kingdom
The main provider of mental health care in the UK is the National Health Service (NHS) and therefore the importance of health insurance parity may seem less relevant. The argument, however, applies to all types of insurance and it is vital that people with mental illness have access to the full range of financial services available to others to enable full participation in society.
The Citizens’ Advice Bureau compiled a large report on mental health and social exclusion. The report highlighted that insurance was an essential purchase in certain circumstances, including in situations such as claims for housing benefit. It found that many insurance policies had “blanket exclusions” for claims resulting from existing or new mental health problems, especially many policies concerned with payment protection. It also found that these policies were often sold to people with existing mental health problems (to whom they were practically worthless) as one-off lump sums added to a loan. For example, a lorry driver newly diagnosed with depression had payment protection insurance to cover £9000 of debts. The policy did not cover for events caused by mental health problems and he was unable to continue repayments. The report welcomes the regulation of the insurance market by the Financial Services Authority (FSA). The FSA rules state that customers need to be informed about “any significant or unusual exclusions from cover”, but the report questions whether exclusions relating to mental health fall under this statement, suggesting that discrimination in insurance policies is entrenched as a mainstream practice.
The report goes on to discuss that the Disability Discrimination Act (DDA) of 1995 discriminates unfairly against people with mental illness as it requires a higher burden of proof for mental disability than physical disability. This burden of proof is defined as a “clinically well-defined illness, recognised by a respected body of medical opinion such as the WHO’s ICD”, and is considered different to physical impairment. The requirement of proof does not seem unreasonable, but its separation from physical impairment does. It is worth noting that the DDA is landmark legislation protecting the rights of disabled people, and that it includes provisions for mental illness.
The Code of Practice  issued by the Disability Rights Commission states that “disability related less favourable treatment” is justified if
1) it is in connection with insurance business carried on by the service provider;
2) it is based on information which is relevant to the assessment of the risk to be insured;
3) the information is from a source on which it is reasonable to rely; 4) the less favourable treatment is reasonable having regard to the information relied on and any other relevant factors.
The Code gives an example of a driver with bipolar disorder applying for motor insurance. The driver, by producing evidence of stability on medication over several years and an unblemished driving record, is able to take out a policy without an increased premium. The Code does, however, only state that insurance cover should not be refused to people on the grounds of “untested assumptions or stereotypes or generalisations in respect of a disabled person”, and does not mention exclusions within a policy that is sold to a person with an existing mental illness or exclusions related to a new onset of mental illness. The Association of British Insurers in its guidance to insurers is ambivalent as to the nature of “mental impairment” as a disability. 
Disability is taken to include “a wide range of impairments relating to mental functioning, including learning disabilities”, however mental illness is not included unless “that illness is a clinically well-recognised illness, recognised by a respected body of medical opinion such as the World Health Organisation’s International Classification of Diseases”. This does not seem an unreasonable statement but it is guidance and not legally binding. It also places the onus on the patient to make sure that the illness is a “well-recognised” one. This may lead to demands from insurance companies for specialist or even sub-specialist opinions that may discourage claimants from pursuing unpaid claims.
It remains to be seen whether exclusions that relate to mental illness within policies will be challenged in court in the UK, and whether there will be sufficient political impetus to establish new legislation or alter existing legislation to prevent discrimination that is based on outdated concepts and unjustified prejudices.
The persistent discrimination of people with “mental illness” by insurers, in terms of life assurance, health and other types of insurance in the UK and the US is unprincipled: against the ethical principle of justice. This discriminationserves to continue the stigmatisation of these individuals and the diseases they struggle with, and is unacceptable, in terms of our knowledge of successful treatment of the diseases that prevents the suffering of individuals and increases their participation in society. There are several possible routes to parity, but it seems unlikely that insurance companies would leave behind the convenient division of mental and physical disorders unless legislation was enacted.
1. Urbina, J. Fitts v.Federal Nat’l Mortgage Ass’n, 44 F. Supp. 2d 317, 331 (D.D.C.)1999.
2. No. 97 Matter of Polon v State of New York Insurance Department. JUNE 2004 CALENDAR, NEW YORK STATE COURT OF APPEALS, Background Summaries and Attorney Contacts (2004).
3. Elovitz, S. W. How Long Is The Long In Your Long-Term Disability Allowance. (2004).
4. Solms, M. Freud Returns. Scientific American, 56-62 (2004).
5. NIMH Factsheet: The Impact of Mental Illness on Society. NIH Publication No. 01-4586.
6. Fontaine, P. H. Congressional Budget Office Cost Estimate: S.543 Mental Health Equitable Treatment Act of 2001. (2001).
7. Cullen, L. (Citizens’ Advice Bureau, 2004).
8. Code of Practice: Rights of Access Goods, Facilities, Services and Premises. Disability Rights Commission (2002).
9. An Insurer’s Guide to the Disability Discrimination Act 1995. Association of British Insurers (2003).
Alan D. Ogilvie , Jakov K. Zlodre