Final Deal Stripped Out Provisions Necessary to Stop Insurer Price-Gouging, Voters Should Demand Reforms
Santa Monica, California –Florida lawmakers passed medical malpractice legislation yesterday to severely limit victims’ rights while doing nothing to reign in physicians’ skyrocketing insurance premiums, said consumer advocates today. Legislators scuttled insurance reform proposals, including a mandatory rate reduction and stricter regulation of insurers. A consumer group predicted that doctors’ premiums will rise again at the beginning of next year.
“The medical malpractice restrictions enacted yesterday are a boon to insurance companies and a severe blow to patients’ rights. The law will not reduce premiums for doctors and, more importantly, it will not deter medical negligence and mistakes,” said consumer advocate Carmen Balber of the non-profit Foundation for Taxpayer and Consumer Rights. “The law depends on the leap of faith that, instead of increasing profits, insurers will reduce rates without any mandate, and that won’t happen.”
The Foundation for Taxpayer and Consumer Rights (FTCR), a California consumer group which has provided testimony to Florida legislators over the course of the year, said that only after California voters passed a ballot initiative in 1988, did doctors receive real relief from unnecessarily high malpractice rates. The group noted today that California voters were forced into the initiative process after a decade of legal caps and other legislative restrictions on consumer rights did nothing to curb insurance premiums.
“As expected, lawmakers in Tallahassee bowed to the HMO and insurance lobby and failed to protect average Floridians. The real solution is now in the hands of the voters, who can enact broad reforms to fix the malpractice insurance “crisis,” and reign in profiteering throughout the insurance industry, through the initiative process,” said Balber.
The legislation passed yesterday limits patients’ recovery by imposing a $500,000 cap on doctors’ liability, and a $750,000 cap on hospitals’. In a further boon for insurers, the bill limits “bad faith” liability (making it harder for doctors to prove they were wronged by their insurer) and prevents HMOs from being held liable for their doctors’ negligence. The bill puts a hold on rate increases until the end of the year, a provision consumer advocates described as meaningless since physicians’ premiums have been so dramatically increased already and because they could rise again in less than five months.
“Insurers didn’t lower malpractice premiums when a damage cap was passed in California, and they aren’t going to lower rates in Florida either,” said Balber. “The only reforms that actually protected California doctors from outrageous premium spikes — a rate rollback and strong regulation — are the same reforms that were gutted from the Florida proposal at the behest of the insurance industry. “
This summer, as the Legislature debated a malpractice cap, Florida insurers reneged on their promise to reduce doctors’ premiums by 20% if a cap were passed. Soon after, an executive of Florida’s largest malpractice insurer admitted under oath that Florida is its most profitable market, despite claims that large jury awards are forcing companies to raise premiums. These two facts make it foolish to expect that insurers will share tomorrow’s savings with the doctors they are gouging today, said FTCR.
A report released this year by FTCR proves how strong insurance reforms, and not a malpractice cap, were able to control premiums for doctors in California. The state passed the Medical Injury Compensation Reform Act (MICRA) in 1975 which capped non-economic damages at $250,000. In the thirteen years after MICRA‘s passage, physicians’ malpractice premiums increased 450%. Only after California voters passed Proposition 103, a ballot initiative which instituted rate regulation and required a 20% rollback in rates, did doctors see their insurance premiums drop. FTCR’s report is available online.