Header image

California’s Experience Show that Caps on Malpractice Suits Only Increase Insurer’s Profits

Posted by Todd Hendrickson in Medical Malpractice

California was one of the first states to institute caps on medical malpractice awards back in 1983. The limit is only $250,000 for non-economic damages. Well, recent reports in the Sacramento Business Journal reveal that the largest malpractice insurer in California is paying out less than 10% of what it collects in premiums to pay claims. It is spending far more to defend claims and even more goes directly to profit. Other insurers in California are paying out as little as 3% in claims. As a result, the insurance commissioner is requesting rate decreases.

This points out that caps do not result in reduced premiums for doctors–they result in higher profits for insurance companies. No surprise, since insurance companies are some of the biggest supporters of so-called “tort reform.” Why? Bigger profits.

We don’t need caps and other forms of “tort reform” in this country. What we need is insurance reform.

You can follow any responses to this entry through the RSS 2.0 You can skip to the end and leave a response. Pinging is currently not allowed.

Leave a Reply

Your email address will not be published. Required fields are marked *