| MrPepper11 2004-10-28, 7:11 pm |
| 10/28/04
Malpractice Insurer Sees Little Savings in Award Caps
By JOSEPH T. HALLINAN and RACHEL ZIMMERMAN
Staff Reporters of THE WALL STREET JOURNAL
One of the nation's largest medical-malpractice insurance companies
told regulators that recently enacted caps on noneconomic damages in
Texas would save it little money.
In a filing with the Texas Department of Insurance seeking a rate
increase, Medical Protective Co., an arm of General Electric Co., said
the caps would lower payouts by just 1%.
Last year, after a pitched political battle, Texans voted to amend
their state constitution to allow caps on awards for noneconomic
damages, such as pain and suffering, in medical-malpractice cases. In
most cases, that cap is $250,000.
Medical Protective's filing was made public by the Foundation for
Taxpayer & Consumer Rights, a Santa Monica, Calif., consumer group
that has opposed such caps. The foundation has also opposed rate
increases by Medical Protective and others in the state of California.
"When the largest malpractice insurer in the nation tells a regulator
that caps on damages don't work, every legislator, regulator and voter
in the nation should listen," said the foundation's executive
director, Douglas Heller...
The question of capping awards for noneconomic damages has triggered
debates at state and national levels, with President Bush a strong
proponent of such restrictions.
The filing in question was made to the Texas Department of Insurance
last year as part of Medical Protective's request for a 19% rate
increase.
In the filing, Medical Protective said, "Noneconomic damages are a
small percentage of total losses paid. Capping noneconomic damages
will show loss savings of 1.0%." Mr. Thompson said he couldn't say
what percentage of total losses paid came from noneconomic damages.
But a white paper dated March 2004 and posted on Medical Protective's
Web site states that capping noneconomic damages is a "critical
element [of tort reform] because in recent years we have seen
noneconomic damages spiraling out of control."
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