A rapidly growing number of victims of cancer, AIDS and other serious illnesses are discovering that under recent court interpretations of a law that was originally intended to protect employees' benefits, their insurance coverage can evaporate when they need it most.
The recent federal court rulings have given a large majority of employers that now act as their own insurers wide leeway to cut back on existing coverage -- or to skimp on coverage in the first place.
These "self-insured" employers, from giant corporations to an increasing number of smaller businesses, have been exempted from state insurance laws governing what ailments insurance companies must cover.
For example, many states require coverage for alcoholism, mental health problems and intensive care for infants with birth defects.
At the same time, a U.S. Supreme Court decision has made it much harder for patients under all kinds of health insurance plans to sue to get benefits they say have been unfairly denied.
Among the most striking cases in which employees found they had insurance in name only were those of Richard Owens in Atlanta and John McGann in Houston.
After Owens began filing thousands of dollars in AIDS claims with his employer, a furniture chain called Storehouse, the company cut its maximum lifetime benefit for AIDS to $25,000 from $1 million.
Similarly, McGann's employer, H & H Music, a Texas retail group, reduced its $1 million maximum to $5,000 for AIDS cases.
A U.S. District Court in Atlanta and a U.S. Court of Appeals in New Orleans ruled last year that the companies had every right to do so. If they had bought their coverage from an insurance company, state laws in both Georgia and Texas would have required that the original AIDS coverage be continued.
Under a string of earlier court rulings, self-insured employers have been exempted from hundreds of state health-care laws.
In effect, the court rulings and the health plans that take advantage of them are another manifestation of a system of private health insurance in which the sick are increasingly separated from the well. That lowers
the insurance costs of the healthy but leaves more of the sick with little or no protection.