00-1021 Rush Prudential HMO, Inc. v. Moran, et al.

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The Illinois HMO Act is directed toward the insurance industry, and thus is an insurance regulation under a commonsense view. Although an HMO provides healthcare in addition to insurance, nothing in the saving clause requires an either-or choice between healthcare and insurance. Congress recognized, the year before passing ERISA, that HMOs are risk-bearing organizations subject to state insurance regulation.

That conception has not changed in the intervening years. States have been adopting their own HMO enabling Acts, and at least 40, including Illinois, regulate HMOs primarily through state insurance departments. Rush cannot submerge HMOs’ insurance features beneath an exclusive characterization of HMOs as health care providers. And the argument of Rush and its amici that §4-10 sweeps beyond the insurance industry, capturing organizations that provide no insurance and regulating noninsurance activities of HMOs that do, is based on unsound assumptions.\

230 F.3d 959, affirmed.

Local effect:

The case arises from the Seventh Circuit, and current law remains the same.

Souter, J.; Thomas, J., dissenting.