Justices Limit Suits Against HMOs
At issue in the cases decided yesterday, Aetna v. Davila, No. 02-1845, and Cigna Healthcare v. Calad, No. 03-83, was the Texas Health Care Liability Act, which was adopted in 1997 while Bush was governor. It makes employer-paid health insurance plans liable for negligence when they wrongfully refuse to pay for medical care.
Bush initially vetoed the bill in 1995, then let it become law without his signature two years later, saying, "This legislation has the potential to drive up health care costs and increase the number of lawsuits. I hope my concerns are proven wrong."
On Oct. 17, 2000, however, in a presidential debate against Democrat Al Gore, then-candidate Bush promised a federal patients' bill of rights like the one in Texas.
"If I'm the president . . . people will be able to take their HMO insurance company to court," Bush said. "That's what I've done in Texas, and that's the kind of leadership style I'll bring to Washington."
Meanwhile, Juan Davila and Ruby Calad sued their health insurance companies in Texas state court, each complaining of serious injuries that allegedly resulted when their managed-care firms refused to pay for treatment their doctors had recommended.
The companies, citing ERISA, had the cases moved to a federal district court, which refused Davila's and Calad's requests to return the cases to state court.
But the U.S. Court of Appeals for the 5th Circuit, based in New Orleans, ruled that the companies could be sued. The health insurance companies appealed to the Supreme Court.
At the Supreme Court, the Bush administration filed a brief arguing that allowing state lawsuits would undermine ERISA, and that the benefits to patients are outweighed by costs to managed-care companies -- which, passed on to employers, "could make employers less willing to provide health benefits."
© 2004 The Washington Post Company
Ruby Calad sued her insurer under the Texas Health Care Liability Act.
(Pat Sullivan -- AP)
_____Findlaw Court Document_____
Opinion: (Aetna Health, Inc. v. Davilla)