What Happens After I'm Gone? The New California End of Life Option Act and What It Means – Part III

What Happens After I'm Gone? The New California End of Life Option Act and What It Means – Part III

By LeslieBlozan, Esq.

This article was originally written for Stone | Dean's At Issue Newsletter. You can find the original & full edition of At Issue Summer 2017 here.

For the past year, terminally ill Californians have had the legal right to terminate their lives with medical assistance. The substance of the law was discussed in Part I of this series, and means of pursuing the decision in Part II. This final article in the series addresses medical and life insurance, and what coverages are available.

Death by suicide is typically not covered by insurance. Medical insurance usually will not cover medical costs incurred due to self-inflicted injuries. Life insurance usually excludes coverage for death at the insured’s own hands. Remarkably, however, the California insurance industry sees things somewhat differently.

Under the terms of the California End of Life Option Act, medical insurers and HMOs are not required to cover aid-in-dying costs or expenses. This includes medications, doctor visits, or any other associated fees. Each medical insurance company, plan and HMO will have its own rules. 

Before considering seeking medical assistance under the Act, the patient should speak with an insurer/HMO representative to see if any coverage exists, even for a portion of the medical care that will be required. The answer may be no, but end-of-life planning requires understanding of the cost burden involved if there is no insurance.

Federally funded medical programs like Medicare and MediCaid do not pay for end of life medical care under the Act; in spite of that, California Medi-Cal does pay for medical services and expenses under the Act.

If the insurer/HMO does not participate in the program directly, they may be able to provide referrals for additional information and assistance. Some insurance organizations and HMOs, however, are opposed to the concept of a person ending their own life. These companies may refuse to provide information or referrals that might otherwise be available. If that happens, the patient can contact advocacy organizations within the state, for more information and referrals.

The California statute clearly states that a person’s choice to end their life, after a diagnosis of a terminal condition, is not suicide. The law views the death as the result of the illness or condition that will lead to death, not as the result of voluntary measures taken by the individual. A death certificate will list the terminal illness or condition as the cause of death; it will not say “suicide.”

The California Insurance Commission underscored the language and intent of the Act, stating in a press release, “Under the new law, if a terminally ill Californian, who meets the criteria in the law, chooses to take the medication to end their own life, the law is clear that is not a suicide, so life insurance policy exclusions for suicide do not apply.”

Although death through means specified in the Act is not legally suicide, life insurance companies may still have a basis to deny a claim. Life insurance policies generally have a 1-3 year period during which the company can contest any claim for benefits. If an insured person dies during this contestability period, the insurer will investigate the death to determine if the policy was fraudulently obtained. An insured must disclose all medical conditions that affect their insurability when they apply for insurance. If any material information is withheld, the company can deny a claim. If an insured commits suicide during the contestability period, a claim will likely be denied. Instead of paying benefits, the company will often return the premiums paid up until the insured’s death.

Even if there is no fraud or misrepresentation in the application, the insurers may be more aggressive in their investigations as to the circumstances surrounding the application and the knowledge of the insured. This remains an open issue, with no case law or statute addressing it yet. In time, suits will be filed and the courts will clarify how the new law works under these circumstances.

The best way to know how any insurer, life or health, will treat a death under the Act is to ask questions and learn in advance. This planning is just one of the many factors to be considered when making a life changing, and life ending decision.

If you or a loved one have questions regarding the End of Life Option Act, or any issue facing the aging population, email the author at LBlozan@StoneDeanLaw.com.

The Elder Law experts at Stone | Dean want to inform seniors and their care-givers of their legal rights and obligations in increasingly litigious times. Find how we can help you by visiting our website StoneDeanLaw.com/practice-areas/elder-law for more information.