ERISA Preemption

[Scott Frederick Gast <sfg4c@cms.mail.virginia.edu>]

I wanted to continue today's class discussion about the 
ERISA preemption policy and the self-insured anomaly in the 
context of an issue that's been in the news lately.

A number of proposals have been offered in Congress for a
so-called "Patients' Bill of Rights," partly in 
response to managed care concerns.  These proposals would 
provide certain protections for patients covered by 
insurance (with provisions such as allowing patients to 
designate a pediatrician or OB/GYN as a primary care 
physician, requiring a "prudent layperson" standard for 
determining whether a visit to an emergency room is a 
covered expense, etc.).

Some proponents have argued that these protections should 
apply to all health care plans as a federal floor of 
benefits.  Others have argued the protections should apply 
only to self-insured plans, as those plans are not 
reachable by the States as a result of the self-insured 
anomaly we talked about today.  They argue that patients in 
insurance contract plans are already protected by State 
laws.

See this 3/21 press release from Representative Charlie 
Norwood (R-GA), which talks about this issue.  Rep. 
Norwood proposes "A simple legislative clarification that 
all state laws in fact do apply to the majority of ERISA 
plans [non-self-insured].":

http://www.house.gov/apps/list/hearing/ga10_norwood/scopeissue031600.html

Would a better alternative to enacting federal protections 
for self-insureds be amending ERISA to allow states to 
regulate self-insured plans?  Would this allow the "laboratories
of democracy" to experiment with various protections, and 
tailor those protections to the individual needs of the 
State's populations?  Or does uniformity in self-insured 
plan regulation outweigh these benefits?

Or should Congress clarify that it meant to provide 
uniformity for ALL plans and enact a federal floor of 
protections that preempts state law for both self-insured 
and contract plans?

Or are many of these protections not necessary (because 
health plans already provide them?), or perhaps 
even harmful, in that they may drive up the cost of 
insurance and leave more people completely uninsured?