NCPA - National Center for Policy Analysis

Increasing The Ranks Of The Uninsured

June 21, 2001

The Congressional Budget Office estimates that proposed Patients' Rights legislation would increase health insurance costs by "only" about 4 percent. But as the Health Insurance Association of America points out, for each one percent increase in the cost of insurance, 300,000 Americans will lose coverage.

Thus, as a new analysis by the Employment Policy Foundation points out, the managed care reform bills now being debated in Congress could cause an additional 9.2 million Americans to lose their health insurance by 2010 -- increasing the proportion of Americans without coverage to a quarter of the population.

Patients' rights legislation would change federal law to allow patients who are denied health benefits the ability to collect punitive damages or "pain and suffering" damages in lawsuits. Under current law, patients must follow a grievance procedure before resorting to the legal system to contest denied benefits. Individuals unhappy with those appeals may file a federal lawsuit to recover the cost of the denied benefits only and may not sue in state court.

  • Thus, EPF estimates that approximately 56,000 new lawsuits would be filed annually, with a cost burden to employers and health care plans of $7.9 billion to $16.3 billion.
  • Lawyers could receive at least $1.4 billion to $2.8 billion annually from the new lawsuits.
  • More than 88 million people in the United States are now covered by managed care or Health Maintenance Organization (HMO) plans, but data from the Bureau of Labor Statistics' Current Population Survey reveals there were 47.1 million people, 17.2 percent of the population, without any form of health insurance in 2000.

Source: "Patients' Rights Legislation: The Triangle of Health Insurance: Quality, Cost and Access," Policy Backgrounder, June 20, 2001, Employment Policy Foundation.


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