The GOP loves big business more than they care about those constituents who elect them. Even thought the GOP uses states’ rights as a big rallying cry for repealing health care reform, they have been totally against amending the federal law that strips the states of their rights–when it comes to health insurance.
ERISA laws or the Employee Retirement Income Security Act of 1974 set standards for pension plans so that when employees retired (and retire even though 401k plans have replaced most pension plans) they can breathe some sigh of relief that their employers did not raid their pension plans leaving them penniless for retirement. That’s one of the things it does, but it does a lot of other things as well. It covers employer-based health insurance plans, 401k plans and some severance plans.
The unintended consequences of having a federal law cover these things, especially health benefits, are that these federal laws pre-empt state laws.
The law limits the abilities of state legislatures to regulate many types of health insurance, it restricts the kinds of remedies that states can authorize (such as a patient’s right to independent appeal of denials or to see specialists) and it can limit the ability of states to experiment with novel ideas for health care solutions.
Two real-life examples of how our state laws and consumer protections are meaningless if we have been abused by our health insurers: The first one is in the Michael Moore movie, Sicko, and features a child named Annette Noe. This is also brought up in Wendell Potter’s book, Deadly Spin. Annette needed cochlear implants in both her ears but CIGNA only paid for one, calling implants in both ears, “too experimental.”
Think Progress featured another child in November of last year, Madison Leuchtmann, who CIGNA also refused to pay for her cochlear implants with the knowledge that this child may remain deaf the rest of her life if she did not receive the implants:
Unfortunately, the Leuchtmann’s family insurer, Cigna, has issued “one denial after another,” flatly refusing to cover the $20,000 bill for the implant. In a written statement to the local news station Fox 2, Cigna explained, “It is not unusual for commercial benefit plans to exclude hearing assisted devices,” prompting Dr. Clary to angrily respond, “This is obviously medically necessary. You have a child that has no ear canals!” Dr. Clary also told Fox 2 that he sees these sort of denials “on a weekly basis.” Watch Fox 2′s report:
Now in Annette Noe’s case, her father used the power of Michael Moore’s movie to get Annette her implants. I have no follow up news for Madison. But more importantly here, could Madison’s parents sue CIGNA to make them pay for her implants? The answer is no. And that’s because of ERISA.
And why is that? Let’s turn to an ERISA expert, an attorney, Richard Johnston and his blog, The Problem is ERISA:
As of now we have a situation where the law tells insurers they face no meaningful consequences if they deny care improperly or even commit outright fraud. As one federal judge has commented, “if an HMO wrongly denies a participant’s claim even in bad faith, the greatest cost it could face is being compelled to cover the procedure, the very cost it would have faced had it acted in good faith. Any rational HMO will recognize that if it acts in good faith, it will pay for far more procedures than if it acts otherwise, and punitive damages, which might otherwise guard against such profiteering, are no obstacle at all.” Insurance companies, of course, are not charities, but corporations; their boards are subject to a fiduciary duty to maximize shareholder value. If it is possible to accomplish this by mistreating insureds, then it follows insurers will do precisely that (and believe me, they do).
There is no incentive, financially speaking, to pay for benefits and these include treatments, transplants and disability benefits that are all covered under the ERISA umbrella.
Where does that leave the GOP who are so “anti-big government but pro-states’ rights? They side with those who would keep these laws in tact every time: The Health Insurance Industry. Disturbing about both groups is their love of thumbing their noses to the new (unconstitutional, as they say) federal law while remaining steadfast on guarding another federal law that hurts the common good. I guess it’s only unconstitutional when it hurts the corporate common good.
Every time ERISA has come up in Congress for some tweaking, guess what has happened? AHIP hires lobbyists, front groups (like this National Coalition on Benefits, they are a real gem) and this group; they all go into action and We, the People, are left in serfdom at the corrupt feet of the Insurance Lords.