Small Businesses Warn Patients' Rights Means More Uninsured
Not all insurance horror stories deal with patients.
By Jeff Levine
July 31, 2001 (Washington) -- Not all insurance horror stories deal with patients. At a Capitol Hill news conference Tuesday, representatives of the small business community expressed their fears that a patients' bill of rights could force them to increase premium costs for their employees or drop coverage altogether.
"We volunteered to provide health coverage for employees. We didn't volunteer to get sued," said Joe Corey who employs 225 people in his four Italian restaurants. Corey is particularly concerned with the bill that's already passed the Senate; it would provide HMO patients broad rights to sue their health plan in state and federal court.
With a vote on patients' rights now expected in the House on Thursday, employer liability remains one of the major stumbling blocks to a legislative compromise. Reports indicate that President Bush has come close to a deal with Rep. Charlie Norwood (R-Ga.) who has been a key backer of a plan favored by the Democrats which the President has threatened to veto, mainly because of the question of excessive lawsuits.
Both the White House-backed plan and the one sponsored by Democrats and moderate Republicans have a number of features in common, including greater access to the emergency room and treatment by specialists, and external review of treatment issues. Still to be determined, though, is the contentious issue of when patients can sue their HMO for denial of care and what the limits of those awards should be.
It appears that a final bill would keep larger employers who self-insure and manage their plans out of state courts where they would face the most potential liability. Meanwhile, the small business representatives complain that a federal court "carve out" to protect large companies is unfair to them.
Even though the major bills now contain a "dedicated decision maker" that would assume liability in the event of legal action, many businesses aren't convinced they would be protected. Rep. Ernest Fletcher (R-Ky.) says the bigger question is liability itself, which would hit small business people at the same time medical costs are going up.
"The thing that scares us the most is holding the employer liable. We go through a middleman, or broker. We have absolutely nothing to do with the decisions that are made for healthcare, and to sue us for it could be devastating," says Bob Richard, who owns a small chain of convenience stores based in Ohio.
A large volume of similar tales was presented at the event that brought together key backers of the White House plan, including Fletcher. He told reporters that he was now "95%" in sync with the tougher measure written by Norwood and Rep. John Dingell (D-Mich.). However, he still has some serious concerns.
"Even though they say you have to exhaust external review, at any point you can sue if you just allege harm. There's very little limits," Fletcher, who's also an MD in family practice, tells WebMD. He estimates that up to nine million people will lose coverage under the Senate version.
However, others dispute that number.
"The claims that it's going to lead to massive loss of insurance coverage are really overheated, provided that the bill contains, as all of them now do, solid protections for employers, who keep at arms length from being sued," Henry Aaron, PhD, a healthcare policy analyst from the Brookings Institution, tells WebMD.
He also points out that a Congressional Budget Office assessment of the Senate and the White House backed plans show that the Senate measure would only add 1.4% more to the total premium cost over five years.
"There are some who will be at the margin ... and if costs go up a little more, you can find some employers who will decide because of that additional little increase, they will drop it," says Aaron.
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