Adjusting to Massachusetts' Health Insurance Mandate
NPR had a story on Morning Edition today discussing various folks' responses to the Massachusetts universal health insurance mandate. The comments were about what I would expect: negative feeling about the Big Brother aspect of the law tempered by a recognition that universal coverage is a good thing.
One of the issues that commonly crops up in this discussion about universal coverage is whether it makes sense to retain the current employer based health insurance delivery system. Many feel it is illogical, overly burdensome to employers, and that we should move to some other way for putting universal coverage in place. Of course, it's anyone's guess how it will all shake out as we watch seemingly inevitable changes in our health insurance system come about in the next few years. But I don't think I've ever seen anyone identify one factor I believe exists that pushes business and insurance leaders to retain the current employer based system. That is the extraordinary legal protections and advantages insurers and other commercial or private payers of medical care have under the current legal regime of ERISA.
Under ERISA payers have 1) no fear of paying punitive damages, 2) no fear of paying consequential damages for out of pocket losses their wrongful denials cause to patients above and beyond the cost of the denied medical expenses the patients actually incur, 3) no fear of jury trials, 4) little fear of costly discovery in litigation, and 5) little fear of judges second guessing their decisions. Plaintiffs in ERISA cases often find their requests for awards of the costs of bringing the suit and attorney fees are denied even with they prevail on the merits of their suit. It is truly difficult to imagine a system that provides a lower level of oversight of the claims processing activity and decisions of payers to a more lenient degree than the one we have now. From that perspective, there are great advantages to private payers in keeping the system of employer based health insurance that we currently have.