insurance policies and to the insurance companies as the statute forbids even reasonable rate increases to reflect the increased risks associated with exposure to AIDS. Some insurers have already ceased doing business in the District of Columbia. The Wisconsin legislature in enacting a similar law may have followed a wiser course of action by providing an escape clause to allow rate increases and by establishing a pool to help fund the health care needs of AIDS victims, thereby shouldering some of the responsibility. 1985 Wisc. Act 73, §§ 4 and 6. The nature of the rapidly changing landscape of AIDS research suggests that the D.C. Council may have acted too hastily in imposing the five year moratorium on rate increases. The D.C. Council, though, considered and accepted the possibility that premiums would increase, and that some of their constituents might therefore be unable to obtain or afford insurance coverage.
Although this Court questions the wisdom of the District of Columbia law as drafted, it cannot find that a rational basis does not exist to support it. It is a basic principle of constitutional analysis that "a belief that an Act . . . may be inequitable or unwise is of course an insufficient basis on which to conclude that it is unconstitutional." Schweiker v. Hogan, 457 U.S. 569, 589, 73 L. Ed. 2d 227, 102 S. Ct. 2597 (1982). Courts, moreover, "are not empowered to second-guess the wisdom of state policies" but must confine review "to the legitimacy of the purpose." Western and Southern Life Insurance Co. v. State Board of Equalization of California, 451 U.S. 648, 670, 68 L. Ed. 2d 514, 101 S. Ct. 2070 (1981) (citing Ferguson v. Skrupa, 372 U.S. 726, 729, 10 L. Ed. 2d 93, 83 S. Ct. 1028 (1963)). The D.C. Council enacted this statute after extensive hearings on its advisability and consequences. The D.C. Council intended to address the serious problem of securing insurance coverage for individuals susceptible to the AIDS virus. See Insurers' Action Council, Inc. v. Markman, 490 F. Supp. 921, 924-25 (D. Minn. 1980) (insurance act's mandatory provision to offer major medical coverage rationally related to "assuring the availability of adequate health care coverage to all residents"). Given the evidence before the Council on the reliability of the screening tests and the medical testimony about the need to ensure access to care and treatment, this Court finds that the D.C. Council had a rational basis for the law.
Although the Court agrees with plaintiffs that new evidence on the accuracy of AIDS tests for insurance purposes and the everchanging breakthroughs in AIDS research raise serious questions about imposing a five year ban on screening applicants for AIDS or increasing insurance rates of individuals testing positive for exposure to AIDS,
the Court finds that the District of Columbia statute is constitutional under the Fifth Amendment.
Plaintiffs argue that the insurance law regulates insurance practices outside of the District of Columbia and therefore violates the District of Columbia Self-Government and Governmental Reorganization Act (hereinafter D.C. Self-Government Act). D.C. Code §§ 1-204, 1-233(a)(3). The D.C. Self-Government Act prohibits the District of Columbia government from passing legislation whose "application is not restricted exclusively to the District." D.C. Code § 1-233(a)(3). The insurance Act on its face could subject out-of-state insurance companies doing business in the District of Columbia to penalties if the companies discriminate against individuals exposed to AIDS.
Defendants admit that the language of the Act is somewhat ambiguous as to its reach but contend that under simple statutory construction the Act applies "within" the District of Columbia. The legislative history indicates that the statute would only apply when the company was doing business in the District of Columbia. The D.C. Council's Report, Section-by-Section Analysis states:
the definition [of insurer] is written broadly enough to encompass all those engaged in the business of health, disability and life insurance in the District, thus applying the requirements of the act to all individual and group policies or contracts issued, amended or renewed in the District.
(Emphasis added) (April 22, 1986) at 14. In hearings before Congress, two Council members stated that the Act was only meant to affect insurance companies when doing business in the District of Columbia. Plaintiffs admit that the legislative intent was that the Act would have no extra-territorial application but argue that under the plain meaning of the statute it is in violation of the D.C. Self-Government Act.
Plaintiffs further argue that the District of Columbia is attempting to regulate insurance practices in other states in violation of the Fifth Amendment. The Supreme Court held in Aetna Life Insurance Co. v. Dunken, 266 U.S. 389, 399, 69 L. Ed. 342, 45 S. Ct. 129 (1924), that a Texas insurance statute was unconstitutional if it regulated business outside of Texas and controlled contracts made by citizens of other states.
Although the statutory language of the Act itself is broad, the legislative history clearly indicates that the D.C. Council intended the statute to apply only when insurance companies are doing business in the District of Columbia.
This Circuit has held that "in deciding among possible interpretations of a statute, the court must select an interpretation that appears to be consistent with the statute's constitutionality." International Union, et al. v. National Right to Work Legal Defense and Education Foundation, Inc., 192 U.S. App. D.C. 23, 590 F.2d 1139, 1148 (D.C. Cir. 1979), aff'd 251 U.S. App. D.C. 75, 781 F.2d 928 (D.C. Cir. 1986); see e.g. United States Civil Service Commission v. National Association of Letter Carriers, 413 U.S. 548, 93 S. Ct. 2880, 37 L. Ed. 2d 796 (1973); Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 80 L. Ed. 688, 56 S. Ct. 466 (1936). Therefore, to avoid reaching the constitutional issue, this Court finds that the D.C. Act can be read as applying only when insurance companies are doing business in the District of Columbia.
Accordingly, for the reasons set forth above, it is this 19th day of September, 1986,
ORDERED that plaintiffs' motion for summary judgment is hereby denied; and it is
FURTHER ORDERED that defendants' motion for summary judgment is hereby granted, judgment is hereby entered for defendants, and this matter is hereby dismissed.
Thomas F. Hogan, United States District Judge