Did a court ruling against mandatory student insurance invalidate Kentucky's hospital payment rule?

Plain-English summary

In 1994, Kentucky's Attorney General said a statute governing what participating hospitals accepted as payment from student health insurance remained valid even after a circuit court held a related compulsory insurance statute unconstitutional. The office interpreted the court's ruling as directed at forcing students to buy coverage, rather than at insurance they chose voluntarily. It therefore read KRS 205.575(14)(d) as still effective for voluntary coverage described in the other statute.

The AG noted that a permanent injunction barred the Department of Insurance from enforcing the mandatory insurance law. It suggested the department might seek clarification from the court about voluntary plans, leaving that injunction issue for the court rather than resolving its reach conclusively.

Currency note

This opinion was issued in 1994. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Historical summary

Participating hospitals

The quoted KRS 205.575(14)(d) required participating hospitals to accept the benefits of the described student insurance as payment in full when that payment at least equaled the hospital's Medicaid rate. The AG said the rule still applied to coverage students obtained voluntarily, despite the separate constitutional ruling on compulsory coverage.

Students and insurers

The Franklin Circuit Court had invalidated KRS 304.18-115's requirement that students at certain Kentucky higher education institutions participate in insurance. The AG read the judgment as addressing mandatory purchase only. It did not read the judgment as condemning voluntary student coverage.

Department of Insurance

The opinion recognized a permanent injunction against departmental enforcement of KRS 304.18-115. Because of that order, the AG suggested asking the court to clarify whether it affected voluntary health plans. The opinion did not purport to modify the court's injunction.

Common questions

Did the AG say the hospital payment provision was invalid?

No. It said KRS 205.575(14)(d) remained valid for students who voluntarily obtained the coverage described in KRS 304.18-115.

What had the court found unconstitutional?

According to the opinion, the Franklin Circuit Court rejected the mandatory requirement that students procure health insurance as special legislation. The AG treated the judgment as limited to compulsion.

Did the opinion remove the injunction against the insurance department?

No. It noted the permanent injunction and suggested a court clarification concerning voluntary coverage.

Background and statutory framework

The request asked about KRS 205.575(14)(d) after Pincombe v. Commonwealth of Kentucky, Department of Insurance had invalidated KRS 304.18-115. The AG compared the hospital reimbursement rule with the court's stated concern about requiring only college students to buy insurance. It applied a presumption of statutory validity and found no compelling basis to invalidate the separate payment rule for voluntary participants.

Citations and references

• KRS 205.575(14)(d): hospital acceptance of qualifying student insurance benefits.
• KRS 304.18-115: compulsory student insurance provision invalidated by the circuit court, as described by the opinion.
• Pincombe v. Commonwealth of Kentucky, Department of Insurance, Franklin Circuit Court No. 91-CI-1097: unappealed judgment discussed by the AG.

Source

• Landing page: https://www.ag.ky.gov/Resources/Opinions/Opinions/OAG94-047.htm

Original opinion text

OAG 94-47

June 27, 1994

Suetta Dickinson

General Counsel

Department of Insurance

P.O. Box 517

Frankfort, Kentucky 40601

Dear Ms. Dickinson:

Your predecessor, Patrick Watts, requested our opinion on the validity of KRS 205.575(14)(d). In our opinion the statute is valid.

KRS 205.575(14) states:

Hospitals participating in the provisions of this section shall:

(d) Accept as payment in full benefits of student health insurance described in KRS 304.18-115 where such payment is at least equal to the hospital's medicaid rate[.]

The statute referenced in the paragraph above, KRS 304.18-115, requires every student at a public or independent institution of higher education located in this state to participate in a student health insurance program. The statute sets out minimum benefits for this insurance and directs the Department of Insurance to implement its provisions.

On July 31, 1992, the Franklin Circuit Court declared KRS 304.18-115 unconstitutional as special legislation. Pincombe v. Commonwealth of Kentucky, Department of Insurance, Franklin Circuit Court No. 91-CI-1097. The decision was not appealed. The court's judgment was based on the lack of "any rationale for imposing requirements upon college students which are not imposed upon the general population of the State of Kentucky or upon all those persons enrolled in educational institutions at the post-secondary, secondary, and elementary levels."

Our reading of the court's judgment indicates that the court was concerned only with the mandatory aspect of the statute. The court held that no one could be required to procure the insurance coverage; the court did not state, or even imply, that any constitutional problem exists with the voluntary procurement of such insurance by students who desire it. Therefore we see no reason why KRS 205.575(14)(d) should not be effective as to students who voluntarily procure the coverage described in KRS 304.18-115.

When asked whether a statute is constitutional, this office will indulge every presumption in support of the statute's validity. We will find a statute unconstitutional only if the case against a statute's validity is compelling. That is not the situation here.

We note in closing that the Franklin Circuit Court entered a permanent injunction against the Department of Insurance forbidding it to enforce KRS 304.18-115. You might wish to move the court for a clarification of its order regarding students who voluntarily participate in health coverage plans.

Sincerely,

Chris Gorman

Attorney General

Ross T. Carter

Assistant Attorney General