Mary Belle Reid Kemp [Kemp] sued Republic National Life Insurance Company [Republic] to recover medical benefits under a group policy. Republic had paid her $144 and insisted that it did not owe the remaining. $8,201.35 because of the medicare provision of the policy. Kemp received no medicare benefits, and was not entitled to do so; but Republic maintained that, since she was over 65 years and a U.S. citizen and resident, she could have enrolled in the government program prior to her sickness and hospitalization. Therefore, the insurer says, Kemp was “eligible for coverage under Medicare” and must exclude from her recovery under Republic’s policy what she might thereby have obtained from medicare.
The district court construed the policy as Republic contends. We do not. We read the provision to reduce Republic’s obligation by the amount of the insured’s medicare benefit — not to reduce Republic’s obligation and the insured’s total benefits to less than the insured’s expense by the amount she could have obtained if she had been enrolled in medicare.
There are no disputed facts. It is agreed that but for section 30, the last section of the policy, Republic would owe Kemp the full $8,345.35 for medical expenses incurred when she was hospitalized in 1978 for cancer of the colon. The policy states that Republic will pay hospital benefits: “the Company will pay the expense actually incurred for Room and Board, ... necessary services and supplies ...” etc. And medical benefits: “the Company will pay the expense actually incurred for treatment by a legally qualified physician ...” etc.
The controversy centers on the two sentences (italicized below) of the paragraph captioned “Integration of Benefits With The Medicare Program” in section 30, which section reads:
SECTION 30 — MEDICARE PROVISION
This Provision does not apply to Life Insurance Benefits, Accidental Death and Dismemberment Benefits, or benefits payable for any loss of time on account of disability, if any such benefits are provided in the Policy.
Wherever used in this Provision, the term “Medicare” refers to Health Insurance for the Aged as provided under both Parts A and B, Title XVIII of the Social Security Act, as amended from time to time.
INTEGRATION OF BENEFITS WITH THE MEDICARE PROGRAM
With respect to each Insured Person who is eligible for coverage under Medicare, a benefit otherwise payable under the Group Policy shall be reduced by the amount of any similar Medicare benefit. It will be presumed that each Insured Person eligible for coverage under Medicare became covered for all parts of Medicare on the earliest possible date and has maintained such coverage in force. [Emphasis ours]
If the Policy contains a “Coordination of Benefits” provision, the definition of “Plan” contained therein shall not be construed to include coverage under Medicare.
Republic reads the first sentence in the “integration of benefits” paragraph to provide that a deduction is made in benefit for any individual insured who is eligible to receive, or to have enrolled and received, a medicare benefit. The insured is thus “eligible for coverage under Medicare.” To be consistent with that reading, Republic reads the second sentence to provide a conclusive presumption that the insured was in fact covered under medicare as of the date of first eligibility.
*339The effect of this reading is to deprive one in Kemp’s position virtually of all protection and to render her Republic hospitalization coverage virtually worthless. When her husband died in 1968, she checked at the Social Security office and was told that he had paid only one or two quarters into the system and she was not entitled to any Social Security benefits. She did not apply for medicare benefits because she did not think she was eligible. She read her insurance policy from Republic and disregarded section 30 because she thought it had no application to her.
Republic would have it apply to anyone who could have voluntarily enrolled in medicare and paid the monthly premiums required of one who is not automatically enrolled.1
The average insured — and, we think, the average judge — would construe the policy to this drastic effect only if the words certainly require it. We do not read them to do so. The policy could easily have said that one entitled to enroll voluntarily under the medicare law would lose Republic benefits whether or not she obtained medicare benefits, so long as she could have enrolled in time to have the hospitalization covered by a medicare benefit. Republic’s policy does not say this; it says that Republic’s benefit otherwise payable is to be reduced by “any similar Medicare benefit.” The caption headlines “integration of benefits.” One who is eligible to enroll, but has not enrolled, is not entitled to receive any “benefits.”
If the words “who is eligible for coverage” stood alone, we could regard them as ambiguous: meaning either an individual who is entitled to enroll and obtain coverage or one who is eligible to obtain medicare’s coverage of a particular loss or expense. We read the words to different effect in the two sentences. Read with the total paragraph, we must give these words in the first sentence the second meaning.2
We agree with Kemp that the second sentence has meaning only if the exclusion itself applies where the insured is eligible for medicare benefits. There is no need to presume or prove coverage under medicare, beginning at the earliest date and maintained in force, if eligibility to enroll ends the matter. The second sentence means that eligibility, without further proof of receipt of benefit, proves parts A and B coverage in fact. The policy says “presume” and a mere presumption (not “conclusive” or “irrebuttable” or “of law”) is hardly a strange expression. It follows, simply, that the insured must prove lack of coverage and benefit, and Kemp did — of all (Parts A and B) coverage. Republic, on the other hand, would rewrite the second sentence as a conclusive presumption — only to create a redundancy.
Having read the learned trial judge’s opinion which agreed with Republic’s construction of the policy, we must deny Kemp’s contention that she is entitled to penalties and attorney fees under La. Rev.Stat.Ann. § 22:657 (West 1978), which applies only when the insurer is arbitrary and capricious and refuses to pay without probable cause.
The judgment is REVERSED and the cause REMANDED.
. Kemp could qualify for Part A of the medicare program if she enrolled in Part B of the program; she could enroll in Part B of the program because she was over 65 and both a United States citizen and resident. 42 U.S.C. § 1395Í-2; 42 U.S.C. § 1395o.
. The Louisiana law, which applies in this diversity suit, favors the insured in the event of ambiguity: “the policy provisions are construed most favorably to the insured and against the insurer. Of the permissible constructions, the courts adopt that which effectuates the insurance over that which defeats it.” Snell v. Stein, 261 La. 358, 259 So.2d 876, 878 (1972).