In one of the cases at issue, a patient sued Aetna for refusing to pay for a pain-relieving drug for arthritis. The other involved a woman who claimed she suffered complications after surgery when CIGNA did not let her stay long enough in the hospital to make a proper recovery.

In addition to Texas, at least nine other states have similar laws that permit legal action against HMOs. Advocates of the state laws have contended that the states have a right under the 1974 Employee Retirement Income Security Act and the McCarran-Ferguson Act to regulate benefit plan disputes that involve the “business of insurance.”

The health plans themselves have argued that the state laws violate ERISA, which preempts state laws and regulations governing benefit plans. The original authors of ERISA argued that preempting state-level interference with employee benefits would help employees by increasing the uniformity and lowering the cost of benefits.

“Allowing respondents to proceed with their state suits would pose an obstacle to the purposes and objectives of Congress,'” Justice Clarence Thomas wrote in the opinion for the court, quoting from a 1987 court decision, Pilot Life Insurance Company vs. Dedeaux.

Federal courts govern benefit determinations even if the decisions involve a mix of medical judgment and eligibility considerations, Justice Thomas wrote.

Justice Ruth Bader Ginsburg, in a separate opinion for herself and Justice Stephen Breyer, wrote that ERISA does preempt state laws allowing consumers to sue health plans, but that Congress ought to revisit ERISA and give health plan members a better mechanism for getting relief from wrongdoing.

Aetna, CIGNA and groups representing insurers and employers are welcoming the decision.

“By affirming the role of ERISA in employee benefits, the court has helped to assure that millions of working Americans will continue to have access to quality health coverage provided by their employers,” Aetna said in a statement.

CIGNA noted in its statement that it has developed an effective appeals process to handle member grievances since states began trying to expose health plans to state court tort suits.

“We view this process which, when necessary, involves the use of independent external reviews whose decisions are binding on CIGNA HealthCare as a fair, efficient and equitable mechanism for consumers to resolve coverage issues,” CIGNA said.

A copy of the opinion is on the Web at http://a257.g.akamaitech.net/7/257/2422/21june20041210/www.supremecourtus.gov/opinions/03pdf/02-1845.pdf.

Allison Bell is an assistant editor for NU's Life & Health Edition.

Reproduced from National Underwriter Edition, June 25, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.