Supreme Court’s Herdrich Decision A Major Victory For Consumers

Jun 12, 2000

FOR IMMEDIATE RELEASE

CONTACT: Richard Coorsh

June 12, 2000

(202) 824-1787

e-mail: rcoorsh@hiaa.org

The following statement was released today by Chip Kahn, President of the Health Insurance Association of America (HIAA):

Today’s Supreme Court ruling in the case of Herdrich v. Pegram is a major victory for consumers who want and need affordable health coverage. In its decision, the Supreme Court unanimously recognizes that health plans must be able to encourage efficient, high-quality health care in order to provide the affordable health coverage that consumers demand.

The Herdrich decision makes clear that a health plan’s use of incentive payments and other devices to encourage affordable health care is not a violation of the Employee Retirement Income Security Act. In so ruling, the high court dealt a body blow against one of the key tenets of several baseless class-action suits launched recently against many health plans. It is our hope that the trial bar will heed the message of Herdrich, and recognize that consumers are ill-served by expensive litigation that would drive up coverage costs and dramatically increase the number of uninsured Americans.

###