Background
Jeannette Simonton and Ryan Kelso were state employees enrolled in Washington’s Uniform Medical Plan (UMP), a self-insured health benefit plan administered by the Washington State Health Care Authority. Both received diagnoses of obesity from treating physicians and obtained prescriptions for medications to treat obesity. When they sought coverage for these medications, their requests were denied based solely on the UMP’s blanket exclusion for prescription drugs used to treat obesity or weight loss. The plan provided no medical necessity determination or clinical evaluation; the denial was categorical.
Simonton and Kelso filed a putative class action alleging that the categorical exclusion violates Washington’s nondiscrimination statute, RCW 48.43.0128(1)(a), which prohibits health carriers from discriminating against individuals in benefit design “because of their . . . present or predicted disability.” Obesity is recognized as a disability under the Washington Law Against Discrimination (WLAD), RCW ch. 49.60. The plaintiffs also asserted breach of contract and WLAD claims. The superior court dismissed all claims, reasoning that a regulation implementing essential health benefits, WAC 284-43-5642, specifically authorized the obesity exclusion and therefore the exclusion could not be discriminatory.
The Court’s Holding
The Court of Appeals reversed the dismissal on all grounds. The court held that a regulation establishing minimum insurance benefits does not determine compliance with the separate nondiscrimination requirement. WAC 284-43-5642 addresses which benefits must be included to satisfy the federal Affordable Care Act’s essential health benefits mandate and which benefits cannot count toward a plan’s actuarial value. This regulation serves the limited purpose of preventing benefit reductions without reducing actuarial value; it does not resolve whether categorical exclusions violate the anti-discrimination statute. The regulation was promulgated in 2013, six years before Washington enacted its nondiscrimination requirement in 2019, and the legislature did not intend the pre-existing regulation to define the scope of the newer anti-discrimination statute.
The court further held that Simonton and Kelso adequately alleged disability discrimination by pleading a categorical exclusion of treatment for obesity—a recognized disability—based on no stated clinical or cost-benefit justification. The allegation that the plan excluded these drugs “because it had always done so” raises an inference of discrimination “because of” disability. The court noted that a categorical exclusion of treatment for a disabling condition, even if the condition itself affects non-disabled individuals, can support an inference of discrimination. This inference is sufficient to survive a motion to dismiss and permit discovery. However, the court emphasized that the HCA may defend the exclusion by demonstrating it is based on “appropriately utilizing reasonable medical management techniques” or that the excluded services are “not medically necessary,” as RCW 48.43.0128(2) and (5) permit.
Key Takeaways
- Regulatory authorization does not equal non-discrimination: A regulation permitting an exclusion under one statute does not shield that exclusion from compliance with a separate nondiscrimination statute, even if the regulation addresses similar subject matter.
- Categorical exclusions based on disability create inference of discrimination: A plan’s blanket denial of coverage for treatment of a recognized disability, without clinical or cost-benefit analysis, can constitute unlawful discrimination at the pleading stage, allowing the case to proceed to discovery.
- Medical justification is required: Health plans may exclude obesity treatments only if supported by legitimate clinical reasoning, cost-effectiveness analysis, or reasonable medical management techniques—not by tradition or budgetary convenience.
- Legislative inaction and budget language do not alter substantive law: The court rejected arguments based on unenacted bills and appropriations language directing non-coverage, holding that neither can override the nondiscrimination mandate.
Why It Matters
This decision has significant implications for disability rights in insurance. It enforces Washington’s adoption of ACA-era anti-discrimination principles while establishing that compliance with insurance regulations regarding essential health benefits is distinct from compliance with anti-discrimination statutes. Health plans cannot rely on longstanding exclusions or regulatory classifications to justify categorical denials of coverage for disabilities; they must affirmatively justify such exclusions on clinical grounds. The ruling also brings Washington law into alignment with Ninth Circuit precedent, which has held that the ACA’s nondiscrimination requirement imposes an affirmative obligation to consider the needs of disabled individuals and not design benefits in ways that categorically exclude treatment for disabilities.
Practically, the decision creates significant exposure for health plans with categorical benefit exclusions targeting specific disabling conditions. Plans will need to conduct or be prepared to defend medical necessity and cost-benefit analyses for any category-based treatment exclusions. For disability advocates, the ruling validates the principle that formal regulatory authorization cannot serve as a shield against discrimination claims and that anti-discrimination statutes operate independently of benefit minimums. The case is especially significant because it involved a state health plan, suggesting that public benefit programs cannot hide behind regulatory structure to avoid anti-discrimination obligations.