The U.S. Supreme Court has issued a unanimous decision that protects health plans against tort suits filed in state courts.[@@]
The ruling involves Aetna Health Inc. vs. Davila and Cigna Healthcare Inc. vs. Calad. Both cases resulted from efforts by Texas to allow members of employer-sponsored plans to sue carriers in state court over benefits determination decisions that involve questions of medical judgment.
Other states rushed to enact similar laws. Advocates of the state laws have contended that the states have a right under ERISA and the McCarran-Ferguson Act to regulate benefit plan disputes that involve the “business of insurance.”
The health plans themselves have argued that the state laws violate the Employee Retirement Income Security Act of 1974, which preempts state laws and regulations governing benefit plans. The original authors of ERISA argued that preempting state-level interference with employee benefits would help employees by increasing the uniformity and lowering the cost of benefits.
The Supreme Court has sided with the health plans.
“Allowing respondents to proceed with their state-law suits would ?pose an obstacle to the purposes and objectives of Congress,’” Justice Clarence Thomas writes in the opinion for the court, quoting from a 1987 court decision, Pilot Life Insurance Company vs. Dedeaux.
Federal courts govern benefit determinations even if the decisions involve a mix of medical judgment and eligibility considerations, Thomas writes.
Justice Ruth Bader Ginsburg writes separately for herself and Justice Stephen Breyer that ERISA does preempt state laws allowing consumers to sue health plans but that Congress ought to revisit ERISA and give health plan members a better mechanism for getting relief from wrongdoing.
Aetna, CIGNA and groups representing insurers and employers are welcoming the decision.
“By affirming the role of ERISA in employee benefits, the court has helped to assure that millions of working Americans will continue to have access to quality health coverage provided by their employers,” Aetna says in its statement.
CIGNA points out in its statement that it has developed an effective appeals process to handle member grievances since states began trying to expose health plans to state court tort suits.
“We view this process ? which, when necessary, involves the use of independent external reviews whose decisions are binding on CIGNA HealthCare ? as a fair, efficient and equitable mechanism for consumers to resolve coverage issues,” CIGNA says.
A copy of the opinion is on the Web at http://a257.g.akamaitech.net/7/257/2422/21june20041210/www.supremecourtus.gov/opinions/03pdf/02-1845.pdf