What Incentive Do Insurers Have to Cover Us When We Can't Sue Them If They Don't?
Remember Nataline Sarkisyan? She was the 17-year-old who died because CIGNA wouldn't pay for her liver transplant. Said it was "experimental." And by the time public outrage forced them to backtrack, she was dead.
Now her parents are trying to change the law that forbids them from suing CIGNA for damages - because until they do, it's cheaper for insurers to let people die:
"It was the worst thing in life," Hilda Sarkisyan said in a recent interview.
Mark Geragos, the high-profile trial lawyer who helped the family make its pleas to Cigna while Nataline was alive, filed the wrongful death suit on the family's behalf last year.
"If you don't sue, you can't make changes," Hilda Sarkisyan said. "It's not about the money. It's about the principle. They are just going to keep denying people care if we don't stop them."
Cigna said the dismissal of the wrongful-death case in April showed that the court "agreed with our position that the Sarkisyans' claims regarding Cigna's decision making were without merit."
In fact, the court did not consider the merits of the family's wrongful-death claims. Instead, it decided those claims could not be heard.
Judge Feess cited rulings by the Supreme Court and others interpreting 1974's Employee Retirement Income Security Act, or ERISA, which governs employee retirement funds and benefit plans.
Under ERISA, the courts have said, the only monetary damages that beneficiaries of workplace health plans can sue for is the cost of the treatment of service in dispute.
The cost of mounting a lawsuit often far exceeds the cost of the treatment in question, patient lawyer Scott Glovsky said. As a result, few lawyers take them on. That has in effect shut the courthouse doors on most treatment coverage disputes involving workplace health plans, which are the source of medical insurance for 132 million workers and dependents.
"ERISA is a license to kill," Glovsky said. "The companies know that they can deny treatment with the sick or dead member having virtually no recourse."
Wendell Potter, a Cigna spokesman who quit after handling the publicity surrounding the Sarkisyan case, agreed.
"HMOs and insurers are largely free to deny access to care without fear of reprisal or financial consequences," Potter said in a speech to the Civil Justice Foundation in San Francisco.
But, without these limits, an industry spokesman said suits against health insurers could be disastrous for consumers.
"It will bankrupt these plans, and employers would no longer be able to offer coverage," said Robert Zirkelbach, a spokesman for America's Health Insurance Plans.
Then maybe you should go ahead and pay for the procedures instead. It would be good for your image and you could save a lot of money!
With Congress considering a healthcare overhaul -- including a requirement that individuals buy health insurance -- Potter, the Sarkisyans and their supporters want lawmakers to undo the high court's 1987 ERISA ruling.
Santa Monica-based Consumer Watchdog sent a letter to key congressional leaders urging them to undo the ERISA ruling, and president Jamie Court said Nataline's case shows why such a move is crucial to any healthcare reform.
"If the insurer decides they don't want to pay for the treatment because they can save a lot of money, there is not a dime available in damages if the person dies or is injured," Court said. "It's cheaper to kill you. If you die, you can't go to court."
It's not the first time this aspect of ERISA has come under fire.
In 2001, the late Sen. Edward M. Kennedy led an unsuccessful effort to take away the protection for health insurers.
"Patients should have the right to hold their HMO accountable in court when its negligence causes the injury or death of a patient," Kennedy told Senate colleagues.
