The following commentary by Jamie Court and Frank Smith was published in The Seattle Post-Intelligencer on Thursday, July 15, 2004:
What right do all government officials have that the taxpayers who pay their salaries don’t?
After two recent rulings by the U.S. Supreme Court, the answer is the right to sue your health maintenance organization or health insurer for damages.
The rulings in Aetna v. Davila and Cigna v. Calad make clear that the federal Employee Retirement Income Security Act of 1974 or ERISA, which applies to 140 million private-sector employees, supercedes any state legal remedy against an HMO for wrongfully denying medically necessary care.
The little known fact is U.S. Supreme Court justices who issued the ruling, the president who lobbied for it at the expense of Texans and members of Congress who have refused to pass a federal patients bill of rights have no such limits. They are not subject to ERISA, nor are recipients of Medicare, Medicaid or other taxpayer-funded health care.
If you want legal rights as an HMO patient, there’s a simple solution now: Go to work for the government, wait to turn 65 or become indigent enough to qualify for Medicaid.
How, in the Mecca of capitalism and democracy, did the most well-paid workers in the world come to lose constitutional rights of redress when wronged?
It started with some creative arguments before the Supreme Court in 1986 by lawyers for a company called Pilot Life Insurance. The attorneys convinced the court that ERISA – a 1974 law protecting private-sector pension funds from boom-and-bust spending by managers – stopped state lawsuits over improper processing of insurance claims for those subject to ERISA.
That was the dawning of the age of the for-profit HMO and HMO abuse. HMOs faced no legal accountability in most cases for mismanaging care. Big conglomerate insurers gobbled up small community HMOs in the ’90s, placed bureaucrats over the decisions by doctors and sparked an HMO patients’ rights movement in state houses across the nation.
It was the very disparity between state politicians’ legal rights to hold insurers accountable under state common law, on the one hand, and the lack of legal rights for patients under ERISA that spurred the “right to sue your HMO” laws in 10 states, including Washington.
This right was the hammer for all the other laws passed by the patients’ rights movement – such as the right to a second opinion, an independent medical review of denials and a return to doctor control over care. Such states as Texas, Washington and California came to believe that if doctors can be sued for medical negligence, then, with ERISA or not, disputes over inappropriate treatment by HMO were appropriately the province of state courts and not subject to the 1986 court reasoning. In its last term, the Supreme Court made clear ERISA pre-empts everything in its path.
The only remedy left for private-sector workers after the Supreme Court’s ruling is the ability of a patient denied a benefit to go to federal court, prove the denial was “arbitrary and capricious,” and then recover the benefit denied – if he or she has not died first.
Heart transplant patients, for example, simply would not have the time to make such an appeal and patients denied a lower-cost treatment such as a prescription drug could hardly sport the legal bill for the case.
What if the only penalty for convicted bank robbers was to give back the money they took? Would there be more bank robberies?
Congress and the president should learn from the state patients’ rights movement. Voters don’t like being have-nots in the health care system but they will not stand for their politicians being have-mores.
Jamie Court is author of “Corporateering: How Corporate Power Steals Your Personal Freedom and What You Can Do About It” (Tarcher/Penguin 2004). Frank Smith is co-author with Court of “Making A Killing: HMOs and the Threat To Your Health” (Common Courage Press 1999).