An Attempt to Increase Medical Malpractice Damages That Failed
In 2014 I wrote this about proposition 46, then on the California ballot:
“Will medical malpractice insurance rates skyrocket if the cap is raised, resulting in doctors fleeing California and a reduction in access to care?”
Medical malpractice attorney Tustin, CA revisits Prop 46
Could A Similar Proposition Win Today?
In my response to my above question on Prop 46 I stated the this was simply not true; medical malpractice insurers in the sate of California have over then last years had such inordinately high profits that they would in all fairness continue to make those above-average profits despite the MICRA law cap being indexed to the rate of inflation. As I stated, the insurance industry at large gained a return of 6.5% on net worth during the last decade. Medical malpractice insurers in California, however, earned a 16.7% return – which is more than 250% of the insurance industry average. More than double. Furthermore, in each of the last eight years (leading up to 2014) malpractice insurers in California had loss ratios of 38% or less – which means in other words that they always had at least 62 cents of each premium dollar, in addition to all income from investment, left over for profit and expenses.
Could Medical Malpractice Damages Ever Be Increased?
If you recall, Proposition 103 gave the State Insurance Commissioner in California the authority to regulate various kinds of insurance rates, including the category of medical malpractice insurance. In fact, in 2012, the Insurance Commissioner found that medical malpractice insurers in the state were overcharging medical professionals too much in their premiums and he cut those rates. This saved California’s physicians more than $52 million in premiums. In sum, California does already have successful and effective system of regulating medical malpractice insurance premiums. It is a system that really won’t change just because of the adjustment of the damages cap.