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Feb 10, 2003
CONTACT: Doug Heller - 310-392-0522 x309
Calif. Consumer Group Shows Insurance Reform Lowered Medical Malpractice Premiums 20%
Report Proves California Insurance Regulation, Not Malpractice Caps, Delivered SavingsWashington, D.C. -- California's system of insurance regulation, not malpractice caps, lowered medical malpractice premiums for physicians in that state, according to a report released today by the California-based Foundation for Taxpayer and Consumer Rights (FTCR). The report assesses premium changes after the passage of California's malpractice caps law -- known as the Medical Injury Compensation Reform Act of 1975, or MICRA -- and those resulting from a 1988 voter approved insurance reform initiative, Proposition 103.
According to the study, available at FTCR's website:
Click here to read the report "How Insurance Reform Lowered Doctors' Medical Malpractice Rates in California".
It was released as part of the testimony of Harvey Rosenfield, the president of FTCR and author of Proposition 103, before the House Energy and Commerce Committee Subcommittee on Oversight and Investigations, in Langhorne, Pennsylvania, Monday morning. It was simultaneously released by FTCR's executive director, Jamie Court, the co-author of Making A Killing: HMOs and the Threat to Your Health, at a briefing in Washington.
In addition to the data analyzed, the report includes California Department of Insurance news releases proving that Proposition 103 refunded millions of dollars to doctors. Insurance industry and doctors' lobbyists have told lawmakers in some states that Proposition 103 did not apply to medical malpractice insurance. The documents and data released today prove that the insurance reform had a dramatic impact, directly lowering rates for doctors.
Read the original California Department of Insurance press releases announcing refunds by medical malpractice insurers.
Read the news articles describing the rate freeze imposed on all California property and casualty insurers, including medical malpractice insurers.
The report also finds that during much of the 1980s medical malpractice caps in California generally tracked national insurance premiums, and skyrocketed 47% between 1985 and 1988 in California. The malpractice caps, which were upheld by the California Supreme Court in 1985, were enacted during an "insurance crisis" of the 1970s; the insurance industry and medical association sponsors assured lawmakers that the caps would reduce malpractice premiums. Clearly, according to the data released today, malpractice caps did not reduce rates.
"With limits on the rights of victims of medical negligence, insurance companies spend less money on patients and more money on insurance company lawyers, but insurers do not lower rates for doctors. Lawmakers looking to California as a model for malpractice insurance reform must understand that regulation worked and liability caps did not," said Heller.
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