ERISA: Federal Judges Call For Reform
Federal judges whose "hands are tied" by the Employee Retirement Income Security Act (ERISA) in cases where patients attempt to sue their health plans are calling on the federal government to reevaluate the law they say has "gone conspicuously awry." The New York Times reported Saturday that ERISA was originally intended to prevent the "looting or squandering" of pension funds and to create "uniform federal standards ... to encourage employers to provide benefits to workers." However, in numerous cases documented by the Times, the statute has in effect precluded any legal remedy for plaintiffs suing HMOs when a denial of care resulted in death or injury. Federal Judge William Young said, "It is deeply troubling that, in the health insurance context, ERISA has evolved into a shield of immunity which thwarts the legitimate claims of the very people it was designed to protect." He noted that "in the era of managed care, treatment itself may be delayed or denied, and this 'can lead to damages far beyond the out-of-pocket cost of the treatment at issue." Federal judges presiding over such cases have declared, with strikingly similar language, that "[m]odification of ERISA in light of questionable modern insurance practices must be the job of Congress, not the courts."
"Changes ... will not come easily" to the "enormously complex and detailed statute," the Times reported, adding that insurance companies, employers and many Republican leaders have a vested interest in resisting reforms. Senate Majority Whip Don Nickles (R-OK) said, "Republicans believe that health resources should be used for patient care, not to pay trial lawyers." Patients' right to sue their health plans is the "hottest question" of health care reform. Some lawyers have tried to find ways around the ERISA prohibition on lawsuits against HMOs, but the statute "nullifies" any competing state law that provides for damages (Pear, 7/11).