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Reagan, Democrats At Odds Over Vaccination Law

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WASHINGTON--As vaccine costs soar and their continued supply remains uncertain, House Democrats and the Reagan Administration remain at odds over solutions for the growing vaccination-liability crisis--despite enactment of a new law designed to compensate victims.

The disagreement centers on how to finance the new "no fault'' compensation program for children who have adverse reactions to immunization for polio, measles, mumps, whooping cough, and other childhood diseases.

While vaccine-related injuries are few in number--one in 310,000 for diphtheria-pertussis-tetanus shots, for example--the expense of chronic care for such victims can be high. Liability insurance for vaccine manufacturers, when available, has increased enormously in cost, and so has the price of each vaccination.

After wrestling with the problem for five years, lawmakers voted on the final day of the 99th Congress to establish the new compensation system, but they had no time to work out a funding mechanism.

This year, Representative Henry A. Waxman, the California Democrat who sponsored last fall's legislation, is pushing for an excise tax on each dose of vaccine, which would go into a trust fund for compensating the families of children with adverse reactions. The issue is now before a House Ways and Means subcommittee.

As enacted, the law is intended to streamline the compensation process--which can take several years under the current tort system--by requiring victims' families to prove only that the injury or death was the result of a vaccine reaction, and not that manufacturers or medical personnel acted negligently.

Under the program, death benefits and payments for pain and suffering are limited to $250,000. But parents who are dissatisfied with the proposed awards retain the right to file a negligence lawsuit.

Administration Objections

In signing the measure into law last November, President Reagan expressed "serious reservations'' about certain provisions, such as the program's administration by the federal judiciary rather than the executive branch.

Recently, the Administration has voiced opposition to both an excise tax and a federal trust fund, arguing that the law should be revised to resemble the workers' compensation system, with responsibility for paying damages left to manufacturers and their insurance companies.

A task force in the Department of Health and Human Services is drafting legislation along these lines, which could be sent to Capitol Hill as early as this week, according to a department source who asked not to be identified. Several Administration officials declined to comment publicly on the proposal last week.

According to sources familiar with the plan, it would eliminate victims' right to sue for damages--as under workers' compensation--and all disputed claims under the no-fault system would be resolved by a "vaccine-compensation review board.'' Also, damages for pain and suffering would be limited to $100,000.

A source involved in drafting the proposal said the Administration objects to the new law's reliance on an "overburdened federal-court system'' in which it would be "expensive for parents to seek compensation.''

The source also argued that "since there's access to the tort system and [the costs] are not terribly predictable,'' the law is unlikely to ease the liability-insurance crisis.

Major Changes Unlikely

Representative Waxman, however, has no intention of accepting major changes in a measure he shepherded through the Congress only six months ago, according to one of his aides, who added: "The Administration's proposal is irrelevant.''

Critics of the Health and Human Services plan expressed strong reservations about its proposed "exclusive remedy,'' which would take away families' right to sue. Such a restriction would be unjust in cases of gross negligence, argued Elizabeth J. Noyes, director of government liaison for the American Academy of Pediatrics.

If awards are fair, she predicted, the no-fault system should work smoothly in most cases. "It's simple justice for families whose children are damaged,'' she said. "Usually, it's nobody's fault. They shouldn't be left to fend for themselves through the court system for six to eight years.''

Vaccines are "a unique product,'' she added, because they are "necessary, inherently dangerous,'' and required by law. Because children "have to participate to go to school,'' she argued, government has a special responsibility to establish an adequate compensation system.

"We feel very strongly that [Mr. Waxman's approach] will work,'' Ms. Noyes said.

The Congressional Budget Office has yet to compute final estimates on the cost of the program. But according to projections commissioned by the academy--with an error rate of 25 percent--an adequate trust fund would be $196 million in the first year and $110 million in the second, Ms. Noyes said. The higher amount in the first year is in anticipation of retroactive claims.

An excise tax of approximately $4 per shot would be sufficient to finance the fund, she said, adding that, while the surcharge would probably increase vaccination costs at the outset, it would stabilize them over the long term.

Because manufacturers are setting aside their own reserves against anticipated liabilities, the expense of some vaccinations has climbed by 300 percent in the past year, Ms. Noyes said.

At a March 6 hearing before the House subcommittee on select revenue measures, vaccine manufacturers were divided over whether to modify the new law or support Mr. Waxman's excise-tax proposal. The panel is expected to act on the issue sometime this spring.

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