Bush Lies: CA Insurance Regulation, Not Caps, Successfully Lowered Malpractice Rates

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Santa Monica, CA — President Bush‘s claim today that a medical malpractice damage cap lowered doctors’ premiums in California is erroneous, said the nonprofit, nonpartisan Foundation for Taxpayer and Consumer Rights (FTCR). Malpractice premiums rose 450% after a damage cap was imposed in California in 1975 and did not fall until a 1988 voter-approved initiative, Proposition 103, began regulating insurance company premiums, according to data from the National Association of Insurance Commissioners.

An FTCR study comparing the effect of the 1975 California caps law mentioned today by President Bush with Prop 103‘s impact on malpractice premiums is available online here.

“California’s experience proves that insurance companies don’t lower rates when we limit patients’ rights. The medical malpractice caps proposed by President Bush won’t lower doctors’ premiums,” said Carmen Balber, consumer advocate for FTCR. “Strong insurance regulation, not the arbitrary caps on patients’ rights proposed by Bush, brought doctors’ insurance rates down in California.”

Proposition 103 required medical malpractice insurers to directly refund more than $135 million to doctors. The reform law has also been used by FTCR to successfully challenge insurance company rate hike proposals, saving California doctors more than $50 million in the past two years alone.

“If President Bush was serious about lowering physicians’ insurance rates, he would talk about reforming the insurance companies that are charging skyrocketing premiums,” said Balber.

President Bush‘s claim that “junk” lawsuits are driving up health care costs is also false, said FTCR, as medical malpractice premiums account for just .62% of total medical costs, according to insurance industry data provided to the National Association of Insurance Commissioners.

Insurance industry profits up 54%

Data released last month by Weiss Ratings reveal that insurance industry profits were up 54% in the first six months of 2004. The data follow a trend of increasing insurance industry profitability, even as malpractice insurers claim rising costs are forcing them to raise doctors’ premiums.

“Insurance industry greed continues to drive increasing physician premiums, and only California-style regulation of insurance rates and profits can stop insurer profiteering at doctors’ expense,” said Balber.

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Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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