MICRA does nothing to decrease costs, but makes a mint for malpractice insurers

by Brian Leubitz

Over the weekend, Insurance Commissioner Dave Jones exposed some of the mistruths that the insurance lobby has been using to fight to save their cash cow, MICRA.

Here’s the thing that nobody really talks about, and that is that those caps have not prevented excessive medical malpractice insurance rates. I know this because one of the first things I did as insurance commissioner was look at the medical malpractice insurance rates, and I discovered that the medical malpractice insurers were paying out in claims just a fraction of what they were collecting in premiums from doctors and nurses and other medical providers. So I actually have rate regulatory authority over medical malpractice insurance…what I did was I ordered the top six medical malpractice insurers to reduce their rates between 10 and 15 percent, and I have saved as a result $52 million annually in premiums for doctors and other medical providers.

Since the mid 1970s, the caps on non-economic damages have stayed exactly the same. And by exactly the same in money terms, it means that you are in fact going backwards every day due to inflation.  And all the while, as the value of $250,000 is getting increasingly small, medical malpractice insurance has been going up and up.

Doesn’t make much sense, does it? As Jones explains, some of the insurance companies have been using MICRA as a way to gouge doctors for increasing premiums while knowing that risk is heavily managed due to MICRA. Rather than some talking points about how MICRA is so critical, we need to look at the underlying facts of the devastating stories of families that are ripped apart with no way to seek justice and their day in court. MICRA, in many situations, closes the courthouse doors to expensive cases, especially when economic damages are difficult to prove. So the net result ends up with carte blanche on negligently treating the poor, the old, the young and those that just generally don’t have a high long term income stream.

We need real reform of the malpractice system, not merely abstract defenses of the status quo while bringing nothing to the table. Jones and others have argued that real reform is possible. It is certainly not the most exciting issue, that is, until it comes up in your life after a tragedy. But we shouldn’t wait for the pile of heartbreaking stories to grow to even more dizzying heights before we act.