Study by W. Va. Lawmakers: Caps Won’t Lower Med-Mal Coverage Rates

January 8, 2003

The West Virginia State Legislature has issued a report finding that imposing caps on damages in medical malpractice lawsuits will not reduce insurance rates for physicians, at least in the near future.

Following the airing of the report, the Association of Trial Lawyers of America (ATLA) renewed its calls for insurance reform, which it considers the only effective remedy for medical malpractice crises afflicting several states.

The final report of the interim Select Committee on Insurance Availability and Medical Malpractice Insurance, which studied the issue for a year, concluded that “any limitations placed on the judicial system will have no immediate effect on the cost of liability insurance for health care providers.”

ATLA President Mary Alexander cited Nevada as an example, where insurance companies refused to lower doctors’ malpractice rates after enactment last year of a cap supported by the insurance industry. In Missouri, another state that caps damages, malpractice premiums are skyrocketing although the number of malpractice claims and the cost per claim have been declining.

West Virginia also has a cap, which did not prevent surgeons from leaving their jobs last week to protest skyrocketing insurance rates.

“The real problem is that the insurance industry has too much control over health care in America,” Alexander said. “Big insurance companies control doctors’ livelihoods and patients’ lives. The situation won’t improve for doctors or patients unless we reform the insurance industry–which operates outside of antitrust laws and colludes in fixing prices.”

Another study by Americans for Insurance Reform, a coalition of 100 consumer groups, found malpractice insurance premiums in West Virginia and elsewhere track economic cycles, not pay-outs in malpractice cases, which have remained flat for the last decade. During economic downturns, insurers raise rates to make up for investment losses, the group found.

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