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State Supreme Court reverses Rock County case in favor of surrogate mothers

JANESVILLE — A Wisconsin Supreme Court ruling favoring local surrogate mothers in a fight with MercyCare Insurance over maternity benefits will increase insurance costs, a Mercy Health System official said Friday.

"While we are respectful of the Wisconsin Supreme Court, we are disappointed in the court's ruling which will have the effect of raising insurance costs," Mercy Health System General Counsel Ralph Topinka said in a written statement.

Justices decided Friday that insurers can't deny surrogate mothers maternity care usually covered under their insurance policies based solely on the insureds' reasons for becoming pregnant or methods of becoming pregnant.

The case began in Rock County when MercyCare of Janesville denied coverage to two surrogate mothers. The Supreme Court decision reverses Rock County Judge James Welker's ruling.

"MercyCare Health Plans agreed with the decision of Rock County Circuit Judge James Welker who ruled that the exclusion for surrogate mother services was lawful," Topinka said. "Three Supreme Court justices also agreed with MercyCare Health Plans that it had the statutory authority to exclude coverage for surrogates. MercyCare's exclusion is one found in virtually every insurance policy in the state."

Lynn Bodi, owner of Madison-based The Surrogacy Center, said justices properly ruled that insurance companies shouldn't treat various classes of pregnancy differently.

"This is a good decision by the Wisconsin Supreme Court because it makes it clear that all pregnant women with insurance will enjoy the same pregnancy coverage regardless of how or why they become pregnant," Bodi said.

Justices heard arguments in the case in March, and attorneys argued that the decision could reach beyond surrogate pregnancies. The case was the first of its kind and could set a precedent in state statute and insurance policy.

Attorneys said the court's decision would affect other pregnancy subgroups, such as women who become pregnant through in vitro fertilization, women who want to give up their babies for adoption or other pregnancies.

The decision also would affect whether insurance companies have a right to question women about how they became pregnant or whether they intend to keep their babies, attorneys said.

MercyCare denied maternity coverage to two surrogate mothers because its policies excluded surrogate mothers who act as "gestational carriers" for other parents.

One woman filed a complaint with the Wisconsin Office of the Commissioner of Insurance. The office decided that MercyCare could not deny benefits to surrogate mothers because its policy and definition of "surrogate mother" were unfair.

MercyCare appealed the decision to Rock County Court, and Welker reversed. The insurance office then appealed.

Attorneys for the mothers said pregnancy is a medical condition that requires care to protect mothers and unborn children. They said it shouldn't matter if the pregnant woman has a genetic link to the baby.

The two surrogate mothers involved in the legal battle are not identified by name in court records. Combined, they incurred more than $35,000 in medical bills during their pregnancies in 2003 and 2004, according to the court opinion.

Attorneys for MercyCare said the insurance office's decision to approve coverage conflicts with state statutes.