President Obama [3] is calling a big part of the health care reform bill he signed into law last March a "Patients' Bill of Rights" [4], suggesting that many of the consumer protections contained in the new law were the same ones the health insurance industry succeeded in killing time and again over many years through a fear-mongering campaign it secretly financed.

Obama is right -- but only to a point. An important right was missing from his list of consumer protections because, once again, insurers had made sure it would not be part of any bill that reached his desk.

The insurance industry defeated many attempts to pass a Patients' Bill of Rights in the 1990s and 2000s, despite considerable bipartisan support in both the House and Senate. It did this by funneling millions of dollars through a big PR [5] firm it hired to set up a front group -- the Health Benefits Coalition [6] -- whose sole purpose was to scare people away from the legislation. The industry also had one especially important ally: Obama's predecessor in the White House, George W. Bush [7]. Bush threatened to veto any Patients' Bill of Rights that he (read: the insurance industry and its business allies) didn't like. Lawmakers were never able to agree on a single bill that Senators and House members could agree to (the House approved a weakened version of the bill Bush presumably would sign but the Senate refused to weaken its bill), so they eventually just gave up.

Obama is correct in stating that some of the consumer protections that will take effect in September are among those that would have been enacted years ago, had Bush and the insurance industry not blocked them, but he is being somewhat disingenuous in stating that those specific protections "made up the original Patients' Bill of Rights."

The Reality

The reality is that the original Patients' Bill of Rights would have accomplished something else that many patient's have long sought: it would have expanded their right to sue their insurance companies for, among other things, wrongfully denying coverage for needed medical care.

An expanded right to sue was the provision in the original Patients' Bill of Rights the insurers and their friends in the business community and the White House hated most, and it is the one provision that is conspicuously absent from what Obama labeled a Patients' Bill of Rights. The fact that a right-to-sue provision was not included in the reform bill Obama signed is a testament to the continuing ability of the insurance industry and its corporate allies to call the shots in Washington when it comes to legislation that really might hurt their profits.

Obama was right in pointing out that the new law will ban some of the most egregious abuses that insurers have engaged in for decades. The new law will:

• prohibit insurers from discriminating against children -- and eventually adults -- with preexisting conditions;
• bar them from retroactively canceling the coverage of policyholders when they get sick if they made an unintentional mistake on an application;
• eliminate lifetime limits on coverage;
• allow women to see an OBGYN without a referral; and
• allow people to seek emergency care outside of a health plan's provider network without having to get approval in advance.

Consumer advocates have fought for years for these protections. Their inclusion in the Patient Protection and Affordable Care Act of 2010 [8] alone made the reform legislation worth passing, in my view. But, as the president noted, the new law is not perfect. One reason it falls short is because it does not give Americans much-needed recourse in the courts when their insurance companies refuse to pay for care their doctors say they need.

Rep. Dennis Kucinich (D-Mich.) tried to amend the reform bill last year to change a 35-year-old law that, among other things, significantly reduced the rights of many patients to sue their insurers, but the industry and its powerful business allies -- including the U.S. Chamber of Commerce [9] -- threatened to derail the entire bill if the amendment passed. Congressional leaders, sufficiently intimidated, stripped it out of any version of the legislation that would make it to the floor for a vote.

People's Access to the Courts Removed or Sharply Limited

Most Americans are probably not even aware that their chances of winning a lawsuit against an insurer over a denied benefit are small to none. The topic hasn't been of much interest to the media in years. Because the industry and its allies quietly and quickly made sure the Kucinich amendment was killed, there was virtually no debate on it.

There was plenty of debate, however, when the original Patients' Bill of Rights was working its way through Congress.

It all started as part of the backlash against the onerous restrictions HMOs began to impose on both doctors and their patients in the 1990s. The HMOs were often refusing to pay for treatments doctors were recommending for their patients, claiming that the treatments were not "medically necessary." Many people who were getting the coverage denials assumed they could get help from the courts by bringing lawsuits against their insurers. What they discovered was that a 1974 law most of them had never heard of, which had been enacted to keep unscrupulous employers from reneging on their commitments to pay retirement benefits to their workers, made it almost impossible for them to get sufficient remedies in the courts.

While the motivation of Congress was to protect employer-sponsored pension plans when it passed the Employee Retirement Income Security Act (ERISA) in 1974, the federal courts over the years have interpreted the law to apply to all employee benefits, including health care benefits. Because it is a federal law, it preempts state laws, meaning that the 130 million Americans enrolled in employer-sponsored ERISA-protected plans cannot sue their insurance companies (or their employers) in state court if they have been denied coverage for a treatment or procedure. The can try to sue in federal court, but even if they succeed, they can only recover the value of the denied treatment or procedure. Federal courts, unlike state courts, cannot require defendants to compensate plaintiffs for pain and suffering or lost wages. The monetary awards to plaintiffs who win their lawsuits are typically so small that few lawyers are willing to represent patients in federal courts.

Those interpretations of the law that restrict a patient's right to sue have been a big blow to consumers and a big win for insurers and employers. The first Patients' Bill of Rights grew out of that backlash against insurance companies and the protection from lawsuits they and their corporate customers enjoy, thanks to ERISA. Because of the widespread public anger over HMOs' practices, the Patients' Bill of Rights was initially so popular it attracted bipartisan support in Congress. The House version was co-sponsored by a conservative Republican from Georgia, Charles Norwood [10], and a liberal Democrat, Charlie Dingell. The Senate co-sponsors were John McCain [11] and Ted Kennedy [12].

Deploying Buzzwords and Generating Fear

Fearing that the law would pass and they would have to operate in a more consumer-friendly way, the insurers got the U.S. Chamber of Commerce and the Federation of Independent Business to join them in a deception-based campaign -- planned and carried out by the PR firm Porter Novelli [13] and the front group it created and staffed, the Health Benefits Coalition—to scare people into thinking that the law would open the floodgates to "frivolous lawsuits." That was a term they knew from focus groups would be especially effective in their multi-million dollar campaign to manipulate public opinion. The effect of all those frivolous lawsuits, HBC alleged, would be skyrocketing health insurance premiums.

There was no real evidence that would happen. In fact, in the two years after the Texas legislature in 1997 passed a Patients' Bill of Rights with an expanded right to sue, only four lawsuits were filed. Nevertheless, the fear-mongering campaign had the intended effect. House and Senate leaders could never agree on a single bill. Bush did not have to exercise his threatened veto because no Patients' Bill of Rights ever reached his desk.

As the recent debate on reform began to heat up and Kucinich and other lawmakers began calling for changes to ERISA, the big for-profit insurers joined several of the country's largest employers to bankroll a new front group called the National Coalition on Benefits. The sole purpose of that group, like its predecessor the Health Benefits Coalition, was to fight any attempt to tinker with ERISA. The strategy worked just like it did the first time. No tinkering was allowed.

More Reform is Needed

Insurers and big employers argue that ERISA allows them to offer benefits to their employees more efficiently because it exempts them from what they pejoratively call a patchwork of state regulations. That's true, but many consumer advocates, health policy experts, jurists and regulators believe that the ERISA preemption of state laws does more harm than good. As the National Association of Insurance Commissioners [14] noted in a comprehensive report on the often harmful consequences of ERISA's preemption of state laws: "ERISA provides few rights to consumers and, more significantly, it is used as a weapon to block the states' implementation of health care consumer rights."

So while Obama's Patients' Bill of Rights represents an important step forward, much more reform is needed if the United States is ever to have a health care system that benefits its citizens more than profit-driven health insurance companies.