Will medical malpractice insurance rates skyrocket if the cap is raised, resulting in doctors fleeing California and a reduction in access to care?
This is simply false; medical malpractice insurers in California have consistently had such high profits that they would continue to make above-average profits even if the MICRA cap were indexed to inflation. The insurance industry earned a 6.5% return on net worth during the last ten years. California medical malpractice insurers, however, earned a 16.7% return – more than 250% of the industry average. Moreover, in each of the last eight years California malpractice insurers had loss ratios of 38% or less – meaning that they always had at least 62 cents of each premium dollar, plus all investment income, left over for expenses and profit.
Proposition 103 gave the California State Insurance Commissioner the power to regulate many types of insurance rates, including medical malpractice insurance. Indeed, in 2012, the Insurance Commissioner found that California’s medical malpractice insurers were charging doctors too much in premiums and he slashed their rates, saving California’s doctors over $52 million in premiums. California already has an effective and successful system to regulate medical malpractice insurance premiums – a system that won’t change because of an adjustment of the cap.