Parties to ACA plans cannot realistically agree fully on EHB coverage
ex ante, because of the unpredictability of any policyholder’s future medical
needs and the impossibility of individualized negotiation of terms. In these
circumstances, disputes over an ACA plan’s EHB coverage seem all but
inevitable. The reasonable expectations doctrine seems well-suited to the
task of interpretation, especially in its original strong form. This is because
the strong form requires the policyholder’s expectations to be “objectively
reasonable.”118 Insistence on an objective view of reasonableness makes
sense where, at the time of purchase, the policyholder did not or could not
anticipate what the plan might cover. In that case, when the policyholder
needs care, she may “expect” coverage of the course of therapy that she and
her physician now think best, regardless of cost.119
The doctrine’s focus on expectations, however, may give us pause. If it
is nearly impossible to form concrete expectations ex ante, how can one use
the concept of reasonable expectations to determine coverage ex post?120
A possible answer lies in focusing less on “expectations” and more on what
is “reasonable.”121 The reasonable expectations doctrine, applied to
disputes over coverage, could be understood to ask what an insurance
policy of this particular sort should reasonably cover.122 But, one might
object, isn’t this the same kind of question that arises with ordinary (
non-ACA) health insurance plans? After all, such plans typically describe
coverage in generic categories, much like the EHB categories, and present
problems of determining what that category includes.
The difference between ACA plans and their predecessor commercial
health insurance policies lies in the ACA’s requirements for coverage of all
the EHB categories, which takes much of the discretion to select services
118. See Keeton, supra note 44, at 967;
In our view, the reasonable-expectations doctrine does not automatically mandate
either pro-insurer or pro-insured results. It does place a burden on insurance
companies to communicate coverage and exclusions of policies accurately and
clearly. It does require that expectations of coverage by the insured be reasonable
under the circumstances. Neither of those requirements seems overly
burdensome. Properly used, the doctrine will result in coverage in some cases and
in no coverage in others.
Atwater Creamery Co. v. Western Nat’l Mut. Ins. Co., 366 N. W.2d 271, 278 (Minn. 1985).
119. See Ingram, supra note 91, at 826–32.
120. See Thomas, supra note 47, at 324–25 (noting that court conclusions about
policyholder expectations are often a fiction); see also Rahdert, Revisited, supra note 45, at
121. See Fischer, supra note 49, at 163 (arguing that reasonableness may be used where
the contract is silent “as to the level and degree of required specificity”).
122. See id. at 164–65 (arguing that courts claiming to honor the policyholder’s
expectations are actually interpreting the contract to serve its social policy purpose).