ERISA, the federal law that applies to almost all health insurance that is obtained through employment, is a license to kill for insurance companies says Doug Drenkow on, "The Insurance Companies' 'License To Kill': ERISA."  Drenkow quotes in proof from an opinion from the United States Court of Appeals for the Third Circuit on the shortcoming and perverse incentives created by ERISA:

"[A]t the same time as ERISA makes it inordinately difficult to bring an injunction to enforce a participant's rights, it creates strong incentives for HMOs to deny claims in bad faith or otherwise 'stiff' participants. ERISA preempts the state tort of bad-faith claim denial ... so that if an HMO wrongly denies a participant's claim even in bad faith, the greatest cost it could face is being compelled to cover the procedure, the very cost it would have faced had it acted in good faith. Any rational HMO will recognize that if it acts in good faith, it will pay for far more procedures than if it acts otherwise, and punitive damages, which might otherwise guard against such profiteering, are no obstacle at all. Not only is there an incentive for an HMO to deny any particular claim, but to the extent that this practice becomes widespread, it creates a 'race to the bottom' in which, all else being equal, the most profitable HMOs will be those that deny claims most frequently."
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