Like used-car salesmen, politicians in Washington, D.C. have taken the flawed, old model of the patients’ bill of rights and slapped a new sticker on it in an effort to fool unwitting buyers.
The legislation has always been a lemon. It did not sell last year, or the year before that, or the year before that.
But it has been reborn this year in the Senate, with a few cosmetic changes, and given a new name: the Bipartisan Patient Protection Act of 2001. This new legislation deserves the same fate as its progenitors.
The new leading pitchmen this year are Senators Edward Kennedy (D-Massachusetts) and John McCain (R-Arizona). The new faces and the new label can’t disguise the reality that this highly flawed piece of legislation is more a payoff to personal-injury lawyers than to patients.
If enacted, it would lead to more litigation in both federal and state courts, and to larger damages awards, thus driving up the cost of insurance and causing millions of Americans to lose their health insurance altogether.
Kennedy, McCain, and their allies in Congress are hawking the new legislation as finally allowing aggrieved patients to sue their HMOs. But the fact is, patients already can sue their HMOs. The real issue is what kind of damages they can recover if an employer-sponsored health plan wrongfully denies them coverage.
Dangerous Expansion of Tort Law
Current federal law permits patients to recover only the value of the denied benefit. Under the new Kennedy-McCain bill, damages awarded in federal court would be capped at $5 million.
Moreover, even if a health plan exercised “ordinary care” in making a decision about whether to cover a certain medical treatment, a claim that it had wrongfully denied coverage could go to state court if it involved a question of “medical necessity.” Once in court, disputes over coverage would be decided under local laws, which would mean juries could award as much money in damages as allowed by the state.
Health plans would then be exposed to massive judgments when a jury decides—in hindsight, after an injury has occurred—that a patient was denied a medically necessary treatment. This would be the case even though the treatment might have had a very low chance of success to begin with, and even though no one has clearly defined what the term “medically necessary” means.
Also, no matter how many assurances are offered to the contrary, disgruntled workers will be free to launch separate lawsuits against their employers for having selected a particular health plan in the first place.
Real Problem Is Limited Choice
Rather than turning the question over to state law, Kennedy and McCain ought to introduce legislation to change the existing restrictions in federal law in order to provide a fair remedy.
But more to the point, if consumers had more options, lawsuits would become less prevalent. Instead of trying to encourage more litigation, as the Kennedy-McCain measure would do, the better approach would be to equip patients with more power and more choice.
There is only one way to give patients effective and meaningful rights: by giving them greater control over their own insurance policies, affording them the ability to select their own insurer, and granting them the right to change insurers if they are not satisfied.
What patients really crave is more power—not alleged rights that in reality only line the pockets of a handful of millionaire lawyers.
Grace-Marie Arnett is president of the Galen Institute, a health policy research organization in Alexandria, Virginia.