G.R. No. 125678, March 18, 2002 (YNARES-SANTIAGO, J.
FACTS:
Ernani Trinos applied for a health care coverage with Philamcare Health
Systems, Inc. To the question ‘Have you or any of your family members ever
consulted or been treated for high blood pressure, heart trouble, diabetes,
cancer, liver disease, asthma or peptic ulcer?’, Ernani answered ‘No’. Under
the agreement, Ernani is entitled to avail of hospitalization benefits and out-
patient benefits. The coverage was approved for a period of one year from
March 1, 1988 to March 1, 1989. The agreement was however extended
yearly until June 1, 1990 which increased the amount of coverage to a
maximum sum of P75,000 per disability.
During the period of said coverage, Ernani suffered a heart attack and was
confined at the Manila Medical Center (MMC) for one month. While in the
hospital, his wife Julita tried to claim the benefits under the health care
agreement. However, the Philamcare denied her claim alleging that the
agreement was void because Ernani concealed his medical history. Doctors
at the MMC allegedly discovered at the time of Ernani’s confinement that he
was hypertensive, diabetic and asthmatic, contrary to his answer in the
application form. Thus, Julita paid for all the hospitalization expenses.
After Ernani was discharged from the MMC, he was attended by a physical
therapist at home. Later, he was admitted at the Chinese General Hospital.
Due to financial difficulties, however, respondent brought her husband home
again. In the morning of April 13, 1990, Ernani had fever and was feeling
very weak. Respondent was constrained to bring him back to the Chinese
General Hospital where he died on the same day.
Julita filed an action for damages and reimbursement of her expenses plus
moral damages attorney’s fees against Philamcare and its president, Dr.
Benito Reverente. The Regional Trial court or Manila rendered judgment in
favor of Julita. On appeal, the decision of the trial court was affirmed but
deleted all awards for damages and absolved petitioner Reverente. Hence,
this petition for review raising the primary argument that a health care
agreement is not an insurance contract; hence the “incontestability clause”
under the Insurance Code does not apply.
ISSUES:
(1) Whether or not the health care agreement is not an insurance contract
(2) Whether or not there is concealment of material fact made by Ernani
Whether or not Philamcare can avoid the health coverage agreement.
HELD:
(1)YES. Section2 (1)of the Insurance Code defines a contract of insurance as
an agreement whereby one undertakes for a consideration to indemnify
another against loss, damage, or liability arising from an unknown or
contingent event.
Section 3 of the Insurance Code states that any contingent or unknown
event, whether past or future, which my damnify a person having an
insurable against him, may be insured against. Every person has an
insurable interest in the life and health of himself.
Section 10 provides that every person has an insurable interest in the life
and health (1) of himself, of his spouse and of his children.
The insurable interest of respondent’s husband in obtaining the health care
agreement was his own health. The health care agreement was in the nature
of non-life insurance, which is primarily a contract of indemnity. Once the
member incurs hospital, medical or any other expense arising from sickness,
injury or other stipulated contingent, the health care provider must pay for
the same to the extent agreed upon under the contract.
(2) NO. The answer assailed by petitioner was in response to the question
relating to the medical history of the applicant. This largely depends on
opinion rather than fact, especially coming from respondent’s husband who
was not a medical doctor. Where matters of opinion or judgment are called
for answers made I good faith and without intent to deceive will not avoid a
policy even though they are untrue.
The fraudulent intent on the part of the insured must be established to
warrant rescission of the insurance contract. Concealment as a defense for
the health care provider or insurer to avoid liability is an affirmative defense
and the duty to establish such defense by satisfactory and convincing
evidence rests upon the provider or insurer. In any case, with or without the
authority to investigate, petitioner is liable for claims made under the
contract. Having assumed a responsibility under the agreement, petitioner is
bound to answer to the extent agreed upon. In the end, the liability of the
health care provider attaches once the member is hospitalized for the
disease or injury covered by the agreement or wherever he avails of the
covered benefits which he has prepaid.
Being a contract of adhesion, the terms of an insurance contract are to be
construed strictly against the party which prepared the contract – the
insurer. By reason of the exclusive control of the insurance company over
the terms and phraseology of the insurance contract, ambiguity must be
strictly interpreted against the insurer and liberally in favor of the insured,
especially to avoid forfeiture. This is equally applicable to Health Care
Agreements.
