The New Jersey Insurance Department has provoked an uproar among medical experts and state civil libertarians by quietly proposing rules that would allow health insurers to screen new applicants for the AIDS virus and to reject those whose tests are positive or who refuse to be tested.
As the administrative proposal came to light, the State Medical Society and civil rights advocates protested that the policy could allow insurers to circumvent existing Federal and state laws that forbid insurers to deny coverage to applicants who have AIDS virus, H.I.V.
The Insurance Department said the proposed rules would apply only to new applicants to group health programs, the kind offered by large employers. It said that people enrolled in programs for fewer than 50 employees would not be affected, citing a state law prohibiting the use of H.I.V. testing for that category. Critics of the proposals said that state and Federal laws ban H.I.V. testing for all medical coverage, setting the stage for a contest over what the law says and means.
"It is almost incredible that they did this," said Neil Weisfeld, deputy executive director of the New Jersey Medical Society. "All of us in the field of health care are shocked that the Department of Insurance went ahead with this proposal without consulting, so far as we can tell, a single health care provider in the state."
The proposed rules were published without announcement in the Oct. 2 issue of The New Jersey Register, the state's rule-making publication. A 30-day comment period expires on Nov. 1.
Ed Martone, director of the New Jersey branch of the American Civil Liberties Union, said the proposed change would diminish the civil rights of people who have AIDS.
"AIDS was added to the handicapped section of the civil rights law 10 years ago, to lower the real or perceived barriers for people with this condition," Mr. Martone said. "This proposed rule brings us back to where we were 10 years ago in terms of health insurance."
The proposed rule changes were authorized by Andrew J. Karpinski, the Insurance Commissioner who recently resigned under criticism that he had concealed what was viewed as a conflict of interest with an insurance firm he owned before becoming Commissioner.
"The proposed rules apply to all life and health insurers transacting business in this state," the proposal reads in part. "Insurers may ask whether the applicant has tested positively for H.I.V. infection and/or experienced any of a list of symptoms including symptoms of H.I.V. infection."
If a series of tests for H.I.V. are positive, "then the insurer may decline coverage for the applicant," the proposal says. At a later point, it adds, "If an applicant refuses to submit to an initial or repeat screening of the immunoblot test" -- an H.I.V. test regimen -- "then the insurer may decline coverage."
The Insurance Department appeared to have been caught off guard by the strong criticism of the proposed rule changes. The department maintains that the changes were made to comply with new reporting rules enacted by the Legislature earlier this year, as well as to assure that health insurance applicants are given the fairest, most up-to-date test for the presence of H.I.V. They pointed out that the department would take public comment on the proposed changes until Nov. 1, after which they could become law without legislative action.
Insurance Department officials said a 1986 department policy banning AIDS and H.I.V. testing for health insurance did not have the force of law. The new rules are silent on the question of the Americans With Disabilities Act, whose ban on discrimination against H.I.V.-infected people has been interpreted to forbid screening health insurance applicants for H.I.V.
The department acknowledged that state law forbids AIDS screening for individual health insurance applicants as well as for members of company policies covering up to 49 people, but said that the large group insurers handling bigger corporate accounts were allowed to screen for the immunodeficiency virus.
"Since they already do it, these rules require that they do it in a fair manner and that they use the latest science," said Kathleen Bird, a department spokeswoman. In any case, Ms. Bird said, it is unlikely that a group carrier would screen all applicants for coverage since it would be "economically unfeasible" to do so.
Marc Buro, the Insurance Department's director of legislative affairs, made much the same point. "Current law," he said, "does not empower the Insurance Department with the ability to stop insurance companies from making underwriting decisions based on health status."
But Mr. Weisfeld of the State Medical Society strongly disputed this assertion.
"Health insurers do not test," he said emphatically. "Life insurers test, but when you go in for health insurance, the company does not say, 'O.K., go in for a physical, and on the basis of our tests, we'll decide whether or not to insure you.' That does not happen, and one would hope that the State Insurance Department were aware of this."
Mr. Weisfeld said that allowing group health insurers, the kind that cover most workers, to screen out people with H.I.V. and AIDS would only increase medical expenses down the road, both because sick people without insurance tend to aggravate their condition, and so end up costing more to treat, and because ultimately they are likely to become dependent on publicly financed Medicaid insurance.
"I don't know if they did their legal reserch, but I know they didn't do their policy research," he said, "and I also know they didn't do their financial research, because if you bring people in for treatment earlier, you get a lower bill than if you bring them in late."
Gov. Christine Todd Whitman has so far declined to comment on the issue, saying she needs time to study the facts. A senior member of her administration, speaking on the condition of anonymity, said the spirit behind the proposed rule changes was nothing less than a step toward forcing individuals to face the consequences of behavior that exposes them to AIDS.
"There is a body of opinion out there that AIDS is a behaviorally based illness," the official said. "It is preventable to the extent that if you do not engage in certain conduct, you will not be at risk for this condition. I think that opinion is an element in the mix here."