Health claims denial for alcohol intoxication: State laws and structural stigma

Abstract

Background:

Alcohol Exclusion Laws (AELs) allow health insurers to deny coverage to those injured due to being intoxicated. Evidence has shown that AELs disincentivize health care providers to screen for alcohol while they deter treatment utilization of people with alcohol use disorders (AUD). Certain states have changed AELs to enhance the health of people with AUDs, but these changes have not been well-documented in the extant literature. This study examined the current status and historical trends of AELs across U.S. states.

Methods:

We conducted a systematic legal analysis in 2023 to examine how state alcohol exclusion laws vary across the US. These laws allow or prohibit insurers from denying coverage for injuries or deaths related to alcohol use. We classified the states into three categories: 1) States that explicitly permit alcohol exclusions, 2) States that explicitly ban alcohol exclusions, and 3) States that have no clear policy on alcohol exclusions.

Results:

We found that 18 states still have Alcohol Exclusion Laws, down from 37 in 2004. Meanwhile, the number of states that have explicitly banned AELs and prohibited insurers from applying Alcohol Exclusions (AEs) to their policies has increased from 3 to 15 in the same period. The remaining 17 states have no clear laws on AEs. We also noted that five states that repealed their AELs did not adopt any specific prohibition on AEs, and four states limited their prohibition to policies that cover hospital, medical, or surgical expenses.

Conclusions:

Our systematic mapping reveals that some states have prohibited AELs in response to their detrimental effects. However, some states still maintain these policies, and none has effectively outlawed AEs in the last ten years, despite their possible role in reinforcing stigma.

Introduction

Excessive alcohol consumption is a significant cause of premature death in the US (Spillane et al., 2020), accounting for an estimated 1 in 5 preventable deaths among adults aged 20 to 49 (Esser et al., 2022). Between 2015 and 2019, over 140,000 alcohol-attributable deaths occurred annually with nearly 3.6 million years of potential life lost due to excessive alcohol use (Centers for Disease Control and Prevention, n.d.). More recently, alcohol-related deaths increased by approximately 25% between 2019 and 2020 (White et al., 2022). It is well documented that excessive drinking increases immediate health risks such as injuries, violence, and alcohol poisoning, as it can lead to long-term health problems, including heart disease, liver disease, numerous cancers, and stroke (World Health Organization, 2018). Additionally, the monetary cost of excessive alcohol use in the US was estimated at nearly a quarter trillion dollars annually and alcohol is a leading risk factor for preventable death and disability (Sacks et al., 2015).

One underlying contributor to the myriad alcohol-related public health concerns is Alcohol Use Disorder (AUD). The National Institute on Alcohol Abuse and Alcoholism describe AUD as a brain disorder on a spectrum of mild to severe that encompasses conditions often referred to as alcohol abuse, alcohol dependence, alcohol addiction, and alcoholism (National Insitute on Alcohol Abuse and Alcoholism, n.d.). According to a study using the 2012-2013 National Epidemiologic Survey on Alcohol and Related Conditions, lifetime and twelve-month prevalences of the disorder in the US were estimated to be 29.1% and 13.9%, respectively (Grant et al., 2015). Over 14 million adults and 414,000 adolescents had an AUD in 2019 (SAMHSA, Center for Behavioral Health Statistics and Quality, 2019a). Despite the high prevalence of AUDs, they remain largely untreated, with less than 6% of persons with an AUD aged 12 or older receiving any treatment during that same year (SAMHSA, Center for Behavioral Health Statistics and Quality, 2019b). Alcoholism is a particularly harshly stigmatized mental condition with persistent negative stereotypes (Schomerus et al., 2014), and stigmatization plays a major role in the lack of treatment utilization of people with AUDs (Carvalho et al., 2019; Chartier et al., 2016; Probst et al., 2015). Furthermore, “structural stigma” involves institutional policies that hinder the opportunities, resources, and well-being of stigmatized groups (Link and Hatzenbuehler, 2016), and recent evidence suggests that one such policy hindering the treatment utilization of people with AUDs is state-level Alcohol Exclusion Laws (AELs) (Azagba et al., 2022a).

In 1947, the National Association of Insurance Commissioners (NAIC) designed the Uniform Accident and Sickness Policy Provision Law (UPPL) as a model law for states to implement (National Association of Insurance Commissioners, 1993). Included in the UPPL is an Alcohol Exclusion provision that permits health insurers to deny coverage to those injured due to being influenced by alcohol or non-prescribed narcotics. NAIC’s impetus for endorsing the state adoption of this provision originally appeared to be two-fold. First, if the insured public knew that potential injuries were not covered if they were intoxicated by alcohol at the time of injury, then this knowledge would discourage their drinking in the first place, at least in theory (Azagba et al., 2022b). Second, if intoxicated individuals had to assume responsibility for injury and health insurers were not liable for any losses, then these companies would ultimately save money (Cochran, 2010). In subsequent years since the NAIC’s recommendation, at least forty states and the District of Columbia had adopted some version of an AEL at some point (NIAAA’s Alcohol Policy Information System, 2023).

By 2001, the NAIC changed its stance and recommended the repeal of the UPPL for several reasons (National Conference of Insurance Legislators, 2004). One reason was that the UPPL discouraged screening and treatment for substance abuse problems among trauma patients, who accounted for a large proportion of intoxicated injuries. Less than 5% of trauma patients were being screened for substance abuse problems and receiving the necessary treatment because the UPPL provided physicians and hospital administrators with a strong financial disincentive to screen patients. Another reason was that the UPPL was outdated and did not reflect the current understanding of alcohol abuse and dependency as chronic illness that can be treated. The NAIC argued that repealing the UPPL would improve public health outcomes and reduce medical costs by increasing access to care and prevention services for people with alcohol problems. In light of NAIC’s reversal from UPPL model law endorsement and its AEL repeal recommendation, numerous states have repealed or replaced the AEL provisions with laws explicitly banning insurers from excluding coverage based on alcohol. Nonetheless, many states continue to have these laws, some of which have existed for over half a century. This paper examines the current status of AELs across U.S. states in 2023. Such information can benefit researchers in monitoring and measuring the effects of AELs and their repeal over time. Furthermore, these updates can inform state legislators’ decisions on allowing or prohibiting insurers’ use of alcohol exclusion clauses.

Methods

We collected baseline data from the Alcohol Policy Information System (APIS). The APIS is a comprehensive database of the National Institute on Alcohol Abuse and Alcoholism that provides information on numerous federal and state-level alcohol-related policies, including UPPL laws. Initial law citations from APIS were recorded and verified using two online legal reference databases, Westlaw and Nexis Uni. Legally trained study team members (overseen by the third author, who is a law professor) reviewed each AEL statute and compiled an archive of relevant parts or sections, including significant dates. After thoroughly reviewing this archive, we established a coding system and examined the following elements using this system: 1) States explicitly allowing AELs, 2) States explicitly prohibiting insurers’ use of alcohol exclusion (AE) clauses, and 3) States with no AE allowance or prohibition.

States that explicitly allow AEs:

Any states expressly permitting the Alcohol Exclusion Law or a nearly identically worded provision were examined. The UPPL’s standard model AEL provision states, “Intoxicants and Narcotics: The insurer shall not be liable for any loss sustained or contracted in consequence of the insured’s being intoxicated or under the influence of any narcotic unless administered on the advice of a physician.” We coded for states that adopted this or similar language and for the year of adoption.

States that explicitly prohibit alcohol exclusions:

Reviewers captured states that expressly prohibited the use of alcohol exclusions, with effective dates of each law banning these provisions. We documented numerous states with AE prohibitions. Because the language in AE prohibition policies varied much more than the standardized language in AE allowance laws, the study team focused its own legal research on documenting these prohibitions and their coverage or exceptions (e.g., explicit applicability to “medical expense policies”).

States with no AE allowance or prohibition:

While many states explicitly allow or prohibit AEs, numerous states do not have laws that positively or negatively address losses due to intoxication. Courts treat silence in insurance regulation as potentially allowing the use of exclusions by insurers, but states also tend to give insurance regulators broad authority to adopt more restrictive policies than those expressed in statutory law (Jerry and Richmond, 2018). In this way, states that neither allow nor prohibit AEs may implicitly allow AEs, although regulators may still disallow them.

Results

States that explicitly allow AEs:

Table 1 shows states that allow AEs with law citations and model UPPL adoption years. Eighteen states continue to have AELs, with nine adopting the model in the 1950s, 2 in the 1960s, 2 in the 1970s, and 5 in the 1980s. Pennsylvania and Kansas have the earliest adoption year of 1951, and Hawaii and South Carolina are the most recent, both in 1988. Arkansas uses the phrase “intoxicants and controlled substances” rather than the standard “intoxicants and narcotics,” and Kentucky includes “intoxicants, narcotics, and hallucinogenics.”

Table 1:

States that explicitly allow alcohol exclusions

State	Citation	UPPL Adoption Year
Alaska	AS § 21.51.260	1966
Arkansas	A.C.A. § 23-85-126	1959
Delaware	18 Del. C. § 3325	1953
Florida	West’s F.S.A. § 627.629	1982
Georgia	Ga. Code Ann., § 33-29-4	1960
Hawaii	HRS § 431:10A-106	1988
Kansas	K.S.A. 40-2203	1951
Kentucky	KRS § 304.17-290	1970
Louisiana	LSA-R.S. 22:975	1958
Mississippi	Miss. Code Ann. § 83-9-5	1956
Missouri	V.A.M.S. 376.777	1959
Nebraska	Neb. Rev. St. § 44-710.04	1957
New Jersey	N.J.S.A. 17B:26-27	1971
New York	McKinney’s Insurance Law § 3216	1984
Pennsylvania	40 P.S. § 753	1951
South Carolina	Code 1976 § 38-71-370	1988
Virginia	VA Code Ann. § 38.2-3504	1986
West Virginia	W. Va. Code, § 33-15-5	1957

States that explicitly prohibit AEs:

Fifteen states that explicitly prohibit Alcohol Exclusion provisions with law citations and effective dates were documented in Table 2. Nearly all prohibitions went into effect in the 2000s, yet South Dakota was the first state to prohibit AEs in 1998, and North Dakota was the most recent in 2009. The prohibition in Indiana, Iowa, North Carolina, and Rhode Island laws applies to a “medical expense policy” or “a policy that provides coverage for hospital, medical, or surgical expenses”. Colorado and Connecticut address individual and group health insurance policies in separate laws. Maryland, South Dakota, and Washington’s prohibitions are specified in 4 separate laws, and Nevada’s are detailed in 6 separate laws covering individual health insurance, group and blanket health insurance, health insurance for small employers, nonprofit corporations for hospital, medical, and dental services, health insurers, and managed care organizations.

Table 2:

States that explicitly prohibit alcohol exclusions

State	Citation	Effective Date
California	West’s Ann. Cal. Ins. Code § 10369.12	01/01/09
Colorado	C.R.S.A. § 10-16-201	01/01/07
	C.R.S.A. § 10-16-214	01/01/07
Connecticut	C.G.S.A. § 38a-498c	10/01/06
	C.G.S.A. § 38a-525c	10/01/06
District of Columbia	DC ST § 31-3103	03/08/07
Illinois	215 ILCS 5/367k	01/01/08
Indiana	IC 27-8-5-3	01/01/08
Iowa	I.C.A. § 514A.3	07/01/02
Maine	24-A M.R.S.A. § 2728	09/20/07
Maryland	COMAR 31.12.07.06	01/01/02
	COMAR 31.11.10.06	01/01/02
	COMAR 31.10.25.05	01/01/02
	COMAR 31.10.28.03	01/01/02
Nevada	N.R.S. 689A.415	07/01/06
	N.R.S. 689B.287	07/01/06
	N.R.S. 689C.197	07/01/06
	N.R.S. 695B.3165	07/01/06
	N.R.S. 695C.205	07/01/06
	N.R.S. 695G.405	07/01/06
North Carolina	N.C.G.S.A. § 58-51-16	10/01/01
North Dakota	NDCC, 26.1-36-09.13	08/01/09
Ohio	R.C. § 3923.82	04/07/09
Rhode Island	Gen. Laws 1956, § 27-18-4	06/16/05
South Dakota	SDCL § 58-17-30.8	01/01/98
	SDCL § 58-41-35.6	01/01/98
	SDCL § 58-18B-27.1	01/01/98
	SDCL § 58-38-11.10	01/01/98
Washington	West’s RCWA 48.21.125	06/10/04
	West’s RCWA 48.44.305	06/10/04
	West’s RCWA 48.46.580	06/10/04
	West’s RCWA 48.20.385	06/10/04

States with no AE allowance or prohibition:

Table 3 shows the seventeen states with no Alcohol Exclusion Laws as of February 2023. Minnesota and Oklahoma had legal provisions that applied only to narcotics and not to alcohol. Alabama, Arizona, Idaho, and Wyoming had alcohol exclusions that applied only to disability insurance. Five states repealed their AELs but adopted no specific prohibition: Montana, Oregon, Tennessee, Texas, and Vermont. And in six states, we located no relevant legal provision: Massachusetts, Michigan, New Hampshire, New Mexico, Utah, and Wisconsin.

Table 3:

States with no alcohol exclusion allowance or prohibition

State	Citation	Status
Alabama	Ala. Code § 27-19-26	AE only for disability insurance
Arizona	A.R.S. § 20-1368	AE only for disability insurance
Idaho	I.C. § 41-503	AE only for disability insurance
Massachusetts	N/A	No AEL
Michigan	N/A	No AEL
Minnesota	M.S.A. § 62A.04	Narcotics only, no AEL
Montana	MCA 33-22-201	AEL repealed 02/28/19
New Hampshire	N/A	No AEL
New Mexico	N/A	No AEL
Oklahoma	36 Okl. St. Ann. § 4405	Narcotics only, no AEL
Oregon	O.R.S. § 743A.164	AE prohibition repealed 01/01/18
Tennessee	T. C. A. § 56-26-109	AEL repealed 07/01/15
Texas	V.T.C.A., Insurance Code Art. 3.70-3	AEL repealed 04/01/05
Utah	N/A	No AEL
Vermont	8 V.S.A. § 4066	AEL repealed 06/05/02
Wisconsin	N/A	No AEL
Wyoming	W.S. § 26-18-126	AE only for disability insurance

Major results of states that permit, prohibit, or have no alcohol exclusion laws are summarized on the US map in Figure 1.

Figure 1:

United States map of alcohol exclusion (AE) laws

Discussion

Excessive alcohol use and its treatment have encompassed varying medical and moral valences throughout US history (Miller and Kurtz, 1994). This social and historical context sheds light on the current legal status of AELs. Alcohol exclusion laws were drafted in the UPPL many decades ago and spread to states nationwide in a different social context than the present, in which alcohol use disorders are recognized as treatable clinical diagnoses (Boness et al., 2022). In Benjamin Rush’s 1784 health pamphlet, “drunkenness” became medicalized as an “odious disease” which could be treated through certain methods of restraint and abstinence (Rush, 1784). The 19^th and early 20^th centuries saw the rise of the “temperance movement” which decried the excessive alcohol use of “inebriates”, and culminated in a brief era of nationwide alcohol prohibition ending in 1933 (Witkiewitz et al., 2019). As the temperance movement gained momentum, excessive alcohol use became viewed more generally by the American public as a moral failure of individuals who lacked self-control (Valverde, 1997). The problem of excessive drinking persisted despite the social stigma it carried, and in 1935, Alcoholics Anonymous emerged as an organization that tried to frame “alcoholism” as a health issue that could be addressed by moral actions such as confession and restitution (Robinson and Adinoff, 2016). However, by 1943, only 6% of Americans viewed alcohol problems as a disease (Gentilello et al., 2005). A few years later, the UPPL was created to discourage alcohol-related risk-taking behaviors by requiring people to personally bear the costs of injuries caused by intoxication, which would theoretically benefit the insurance companies by lowering their costs (Cochran, 2010).

After decades of research, NAIC shifted from its original position of supporting AELs. Excessive alcohol use is a severe health issue that affects millions of people in the United States. It is not a simple matter of willpower or personal choice but a complex disorder that genetic, environmental, and social factors can influence. People with alcohol use disorder (AUD) may experience problems controlling their drinking, cravings for alcohol, withdrawal symptoms when they stop drinking, and negative consequences in their personal and professional lives. Likewise, state enactment of AELs inadvertently produced several damaging impacts. AELs signaled to physicians that patients could lose insurance eligibility or be denied reimbursement by insurance companies based on how physicians approached their patients’ treatment. In practice, these risks meant that physicians were disincentivized to test the blood alcohol content of injured patients who may have been intoxicated during injury (Rivara et al., 2000; Schermer et al., 2003). Unscreened patients naturally would not receive treatment for alcohol-related disorders, despite the effectiveness of treatment (Chezem, 2004; D’Onofrio and Degutis, 2002; Gentilello et al., 1999). A prior study revealed that nearly a quarter of trauma surgeons encountered insurance denials related to substance use in the previous half-year, whereas more than 82% expressed their willingness to offer screening and treatment for alcohol problems if insurance obstacles were removed (Gentilello et al., 2005). Though AELs could save insurance companies money, denying coverage for intoxication injuries burdens trauma centers significantly (O’Keeffe et al., 2009). These uninsured costs also caused hardship for the families of the injured, who, along with the patient, absorbed subsequent bad debt. And states and the federal government bore additional costs through programs that address the chronic needs of those with untreated alcohol-related disease and social deprivations (Teitelbaum et al., 2004). Additionally, half a century of research since NAIC’s original recommendation has redefined excessive alcohol use (via such iterations as alcoholism, alcohol abuse, alcohol dependency, and alcohol addiction) as AUD, a treatable chronic illness (American Psychiatric Association, 2013). Nevertheless, according to AELs, insurance need not cover any injury that occurs while a person is intoxicated, regardless of whether the intoxication reflects an alcohol use disorder (AUD). This policy implies that intoxicated accidents are caused by the individual’s moral weakness and personal responsibility rather than by a public health issue (Gentilello et al., 2005; National Conference of Insurance Legislators, 2004).

Due to NAIC’s reversal of endorsement of AELs, numerous states have shifted their policies. Comparing a study nearly two decades old with the results of the present study shows these significant changes (Rosenbaum et al., 2004). Between 2004 and 2023, the number of states allowing AEs decreased by nineteen (37 to 18), and the number of states prohibiting AEs increased by twelve (3 to 15), reflecting an increase in AEL repeal. More specifically, the District of Columbia and nine states changed from AE allowance to prohibition, including California, Illinois, Indiana, Maine, Nevada, North Dakota, Ohio, Rhode Island, and Washington. Five states shifted from explicit AE permission to no law, including Montana, Oregon, Tennessee, Texas, and Vermont. In comparison, three states changed from having no law to expressly prohibiting AEs—Colorado, Connecticut, and Maryland.

Even as such changes are notable, so is the persistence of AELs in many states. The laws shown in Table 1 have been longstanding despite evidence of the unintended consequences of AELs, NAIC’s endorsement of AE prohibition, and calls for AEL repeal from numerous stakeholder organizations, including the American Public Health Association (American Public Health Association, 2004) and the American Medical Association (American Medical Association, 2016). By continuing to permit the exclusion of health coverage for intoxicated injury, these laws preserve the outdated notion that adverse consequences of alcohol use should be viewed as evidence of a lack of willpower and immorality for which an individual is exclusively liable (Valverde, 1997). Furthermore, such policies may perpetuate the stigmatization of AUDs and therefore inhibit treatment utilization (Link and Hatzenbuehler, 2016). If these policies signal such moral approbation, they may also implicitly reinforce the social stigma associated with treatment in which entering treatment exhibits the “potentially humiliating evidence of failure in self-management” (Room, 2005). Using a difference-in-differences quasi-experimental design to study the policy impact of AEL repeal on alcohol treatment admissions, one recent study found a 16% increase in the number of alcohol-treatment admissions from healthcare professional referrals in states that repealed AELs versus states that had or never had AELs (Azagba et al., 2022a). This implies that AELs may be a barrier to treatment-seeking behavior. There is evidence that excessive alcohol use is severely stigmatized (Schomerus et al., 2011), and that stigmatization interferes with the treatment utilization of people with AUDs (Carvalho et al., 2019; Chartier et al., 2016; Probst et al., 2015).

Although additional research is needed to more fully identify and better understand the associations between AELs and AUD stigma processes, existing evidence is sufficient for states to consider a legal change. Dismantling state-level AELs may enable states to 1) detect drunk drivers more efficiently as physicians will no longer be disincentivized to test blood alcohol content; 2) decrease overall health care costs by limiting barriers to AUD diagnosis, thereby preventing future accidents and their costs; and 3) provide improved treatment for alcohol use disorders by encouraging treatment-seeking behaviors and curbing the structural stigmatization associated with AUDs.

This study is limited in a few notable ways. First, we focused on Alcohol Exclusion Laws in health insurance only. AELs also apply to other fields, including disability, auto, accident, and life insurance, and these fields were not covered in this study. Second, because state AE allowances, prohibitions, and silences continue to fluctuate, this study represents only a snapshot of state laws as of 2023. Its findings could be compared with the results of future studies to identify further policy trends. Third, besides alcohol, AELs also invariably exclude coverage of intoxication due to narcotics not prescribed by doctors. The effects of narcotics exclusions on substance use and treatment are poorly understood, but they offer fertile ground for research concerning policy impacts. In addition, the different legal statuses of alcohol exclusion laws (i.e., banned, allowed, or not specified) in various states across the US reflect the diversity of regional contexts and preferences. A possible direction for further research is to examine from a sociological and economic perspective the commonalities and differences among states with the same legal status of alcohol exclusion laws. Moreover, the international situation of alcohol exclusion laws, whether they exist, have been repealed, or are not mentioned, may offer a valuable comparison with the results of this study.

Conclusion

This study examined the current status and trends of Alcohol Exclusion Laws (AELs) in the United States. AELs allow insurers to deny health claims for injuries or illnesses related to alcohol intoxication. We found that some states still have AELs, while others have explicitly banned them and prohibited insurers from applying Alcohol Exclusions (AEs) to their policies. Some states have no clear laws on AEs, and others have limited their prohibition to certain policies. Previous studies suggest that AELs do not deter alcohol consumption or binge drinking and may negatively impact people’s willingness to seek medical care after alcohol-related injuries or illnesses. Stakeholders have recommended that policymakers consider abolishing AELs and ensuring that all health insurance policies cover alcohol-related claims without discrimination or penalty.