An unintended loophole in the federal ERISA law prevents patients with private-sector, employer-paid healthcare from recovering damages against HMOs that harm them. The 1987 Pilot life v. Dedeaux decision has tied the hands of federal judges when the awarding of damages is warranted.

• Fifth Circuit Court of Appeal Judge Carolyn Dineen King, ruling in Corcoran v. United Healthcare Inc., 965 F.2d 1321 (5th Cir. 1992), commented that recent health insurance industry “cost containment features…did not exist when Congress passed ERISA. Fundamental changes … seem to warrant a reevaluation of ERISA so that it can continue to serve its noble purpose of safeguarding the interests of employees. Our system, of course, allocates this task to Congress, not the courts.” She continued, saying ERISA “eliminates an important check on the thousands of medical decisions routinely made. With liability rules generally inapplicable, there is theoretically less deterrence of substandard medical decision making.”
• Federal District Court Judge William J. Acker, Jr., in his Jordan v. Reliable Life Ins. Co., 694 F. Supp. 822, 827 (1988), decision, stated, “The ERISA quicksand is fast swallowing up everything that steps in it or near it. This morass serves as a state for the theater of the absurd…Only Congress or the Supreme Court can rescue us from the quicksand. If the congressional intention were to immunize insurance companies from liability whenever they can show some arguable reason for their refusal to pay a claim, federal district courts should have already ordered the appropriate rubber stamps. There is growing phalanx of courts expressing the fear that ERISA will continue to expand and to preempt everything in its meandering path.”
• Federal Judge William Young, in Andrews-Clark v. Travelers Insurance Co., 1997 US Dist. LEXIS 17390,21 E.B.C. 2137 (D. Mass 1997), wrote, “Disturbing to this Court is the failure of Congress to amend a statute that, due to the changing realities of the modern health care system, has gone conspicuously awry from its original intent. This court had no choice but to pluck [the] case out of state court…and then, at the behest of Travelers, to slam the courthouse doors in her [the wife’s] face and leave her without any remedy. ERISA has evolved into a shield of immunity that protects health insurersÖfrom potential liability for the consequences of their wrongful denial of health benefits.”
• Tenth Circuit Court of Appeals Judge John Porfilio, in Cannon v. Group Health, 77 F.3d 1270 (10th Cir. 1996), stated that “Although moved by the tragic circumstances of this case, and the seemingly needless loss of life that resulted, we conclude that the law gives us no choice but to affirm” that her husband has no remedy.
• Federal Judge J. Spencer Letts, in Dishman v. UNUM, CV 96-0015 JSL. Central Almanac, Vol. III, No. 4, 6/2/1997. pp. 3-6, 15-17, ruled, “However, the facts of this case are so disturbing that they call into question the merit of the expansive scope of ERISA preemption. [The insurer’s] unscrupulous conduct in this action may be closer to the norm of insurance company practice then the Court has previously suspected. This case reveals that for benefit plans funded and administered by insurance companies, there is no practical or legal deterrent to unscrupulous claims practices. Absent such deterrents, the bad faith denial of large claims, as a strategy for settling them for substantially less than the amount owed, may well become a common practice of insurance companies.”
• District Court Judge J. Garbis, in his Pomeroy v. John Hopkins, 868 F. Supp. 110 (1994), decision, stated, “the Court recognizes that preemption of Plaitiff’s state law claims may leave the Plaintiff without an adequate remedy from the HMO for their alleged damages. The Supreme Court has made clear, however, that ERISA is to be broadly construed…Ultimately, whether the ERISA civil enforcement provisions must be reexamined and reformed in light of modern health care is an issue which must be addressed and resolved by the legislature rather than the courts.”
• US Court of Appeals for the Ninth Circuit Judge David R. Thompson wrote, in Bast v. Prudential, 98 C.D.O.S. 4155, “The Bast’s state law claims are preempted by ERISA, and ERISA provides no remedy. Unfortunately, without action by Congress, there is nothing we can do to help the Basts and others who may find themselves in this same unfortunate situation.”