ERISA Deal in Health Bill Betrays Democrats’ Doublespeak

Arizona Rep. John Shadegg exposes provision in health bill worth millions to demonized insurance companies

You might have to watch this one twice. I did. This is a bit confusing to follow, but I’m going to break it down as best I can when I have some time soon. In the meantime, it’s just another example of how health care reform is being sold as one thing, but in reality is a completely different animal.

UPDATE: So, I asked an acquaintance of mine who handles ERISA law for a big firm here in the northeast about the significance of Shadegg’s discovery. After all, I understood the basics of what the congressman was saying, but I didn’t understand well enough to instruct others. While my friend here is a closet conservative and a possible congressional candidate himself in the near future, I can’t give his name at this point. Nevertheless, here’s the note I received from him:


Wow. I hadn’t heard of this until you pointed out the video, but this is pretty significant. While I don’t want to put words in the mouth of Congressman Shadegg, I think I can explain what he was getting at.

Under the decisions in Pilot Life Ins. Co. v. Dedeaux and Corcoran v. United Healthcare Inc., ERISA preempts any and all state laws which would otherwise grant a right of recovery to those injured by the negligent or even intentional denial of medical care coverage by an HMO or insurance carrier.

The result in Corcoran was that the Corcorans were held as preempted from seeking damages under Louisiana state law from the insurance company for the grossly negligent decision to ignore not only the Corcorans’ doctor’s advice, but their own expert witness doctor’s advice, which was to immediately hospitalize the expectant mother. Ignoring that advice resulted in the death of the Corcoran’s baby. The most that ERISA would allow as a recovery in federal court is the cost (or value) of the care or coverage denied.

From what it looks like in this bill, this same preemption is preserved, but only if the persons insured do not have coverage from a non-federal source, such as a private insurance company. (Until those are inevitably forced out of the marketplace.) In other words, without the federal health care “public option,” persons suffering from the death of a child because of care denied would share the same fate as the Corcorans: preemption of state law rights to sue for damages and a cap on any federal recovery limited to the cost of the care denied.

But if the new health care reform bill passes, and the insureds get (or are forced to get) their insurance from the government’s planned “Health Insurance Exchange,” then the previously-existing ERISA preemption of state laws is lifted, and wrongful death and damages actions under state law above and beyond the mere cost of coverage denied against ERISA-covered HMOs and insurance companies will no longer be precluded. The sky’s the limit. Perhaps this is why the trial attorneys have been so silent about opposing the federal healthcare takeover?

While it might be argued that this lifting of the ERISA preemption is a “good” thing, by conditioning it upon and coupling it with the federal takeover of the nation’s private healthcare system, Nancy Pelosi and the Democrats practice the worst form of hypocrisy. Rather than simply fixing the preemption effect of ERISA as laid down and confirmed in Pilot Life, which Congress could do at any time, the proposed legislation seeks to bribe the personal injury tort bar into silence in order to increase the chances for passage.

One other thing. People need to understand that simply reading the 1,900 pages in the new bill doesn’t even come close to quantifying the number of pages of laws people would need to read in order to get the full picture. Every time one of these bills makes reference to some other law, unless a reader goes to that other law and examines exactly what that law says, it is difficult if not impossible to understand what exactly the bill incorporating and referencing it is proposing.

I’ve not tried to ascertain how many additional pages of laws so incorporated and referenced one would need to read to get a clear picture, but my guess would be at least ten times as many pages as the host bill. Therefore, in order to understand what the Pelosi bill really means, instead of 2,000 pages or so, you should be prepared to read roughly 20,000 pages of already-existing law. In 72 hours before the vote, of course. And, barring a 400-page amendment dropped at the last moment, you’ll be done.

Bottom line, though, is that this bill is an absolute wonderland of horrors. If it passes, America as we know it is in a world of trouble. Meanwhile, I hope my explanation helped.



  1. Gail B says:

    It's pretty clear to me (although I'm familiar with language in insurance policies)– If this monstrosity, this diabolical piece of slime passes, well, to put it nicely, we are screwed!

  2. Anonymous says:
  3. Irritated says:

    You know this bill is bad when congress protects their own insurance plans from the risks they want to impose on ours. Here are a couple of quotes I found online.

    From Federal News Radio:

    We all want the best for everybody, but selfishly, if you're a federal worker or retiree, or you're a member of the FEHBP, you don't want everybody in America in your plan because of the pre-existing conditions and the uninsurability, in many cases.

    From the Federal Times:

    The bill currently does not open up FEHBP to the public, as was proposed during the previous health care reform effort in 1994. But Adcock said that could change.

    “Things can be very fluid,” Adcock said. “In this process, we could wake up one day and find interest in opening up FEHBP to nonfeds.”

    If that happens, many thousands of older and sick people who can’t get coverage elsewhere would probably flock to FEHBP, Adcock said. And such a great influx of high-risk people would likely drive up premium costs, he said.

    “If nonfeds had access to FEHBP, we would insist they have separate risk pools for calculating premiums,” Adcock said. “That’s not getting much traction at this point, but we’re going to be watching this very closely.”

  4. WHY NOT CAMERAS? says:

    Memphis Mayor A C Wharton announced Friday that 24-hour surveillance cameras, which the public can access, will be installed at the Memphis Animal Shelter.

    The facility at 3456 Tchulahoma was taken over Tuesday by the Shelby County Sheriff's Office, after a tipster complained to the Shelby County District Attorney General's Office of abuse and cruelty. Deputies discovered some animals in the shelter were sick or had been deprived of food and water.

    = = = = = = = = = = = = = = =
    Why not put online accessible cameras in Senate and House conference rooms?

  5. Jodie Man says:

    Jeff, granted it has dire consequences to the current participants of the ERISA plans, but why was that even mentioned in this bill since all it does is let the insurance companies off the hook? A deal struck with the insurance companies to appease them? I think not since it is at the expense of the union members who comprise a vast support system, both in dollars and people/vote count, to this administration.

    Now, extrapolate the ERISA plan out to include the public option plan in which someday, probably soon, we will all be forced into. This provision lets the government off the hook when the government's "insurance-type decision team equivalent (i.e. the death panel)" refuses care to public option participating citizens and they suffer dire consequences. The doctors will be liable(maybe), but the insurance provider(i.e. the government), who caused the consequences, will carry no liability. The unions will strike a deal to remove themselves from this part of the legislature, but what about the citizens falling prey to the "public option"? Who will speak for us? We have only ourselves to speak up for ourselves — and now is the time.

    We have to look beyond the words on the paper or the words being spoken to see what is really in store for all American citizens' future, as in this case. Each bill, each speech, each action from Washington is a single piece of the puzzle that by itself can seem innocuous, but when pieced together discloses their true intent, which, in my opinion, is the demise of our great Republic and the enslaving of all Americans to our own government.

    Thank you for all the exposure of these important "puzzle pieces". I continue to watch, read, research, and spread the word so more are informed.

  6. MADAM SPEAKER says:

    Dear Ms. Pelosi,

    It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood; if they be repealed or revised before they are promulgated, or undergo such incessant changes that no man, who knows what the law is today, can guess what it will be tomorrow. Law is defined to be a rule of action; but how can that be a rule, which is little known, and less fixed?

    James Madison

  7. Rix says:

    I am not getting it. We are being raped, brutally and viciously, and we cannot even respond with violence? The conservatives of the Land of the Once-Free have a *lot* to learn from Israeli "youth of the hills"…

    Verification word: TUREAR. Very, very eloquent.

  8. Anonymous says:

    I understood the Senator on first take and it is frightening to say the least. Jodie Man has a great point. Bombard your senators and reps with letters, emails, calls to not only scrutinize these bills, but to vote no on the Cloture vote (motion to proceed)in the legislature; otherwise, it doesn't matter what the bills say.

  9. Rich says:

    I can confirm the situation is every bit as bad as Congressman Shadegg says it is … and worse. I represent claimants in cases against ERISA insurers, and it isn't pretty. To save space here I will just cite my ERISA-reform blog, for those interested in this scam which is the fault of both parties and many administrations back into the 70s.

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