Insurers Urge Veto of Maryland Med-Mal Measure

January 7, 2005

Insurance companies, claiming that the measure will have only minimal effect on insurance prices for doctors, are urging Maryland Gov. Robert Ehrlich (R) to veto a reform bill passed last week by lawmakers.

The American Insurance Association urged Ehrlich to veto HB 2, which includes various changes to the civil liability system for medical malpractice cases, but few that are significant or expected to produce meaningful cost savings.

“An independent actuary retained by the Maryland Insurance Administration has estimated that the legislation will generate savings of 2.9%,” stated Tammy Velasquez, AIA assistant vice president, mid-Atlantic region. “If this estimate is correct, HB 2 will have minimal effect on the true cost of the medical malpractice insurance system.”

Velasquez maintained that HB 2 does not include some of the civil liability reforms that have been effective in other states to help control costs such as limitations on attorney’s fees, mandatory collateral source offsets and structured settlements, limitations on the calculation of future economic damages, a reduction in the cap on non-economic damages and Good Samaritan protection for emergency room care.

Additionally, HB 2 resurrects the concept of a “people’s counsel,” which would apply not only to medical malpractice insurers but also to homeowners’ insurers. This “ill-conceived notion,” as Velasquez described it, empowers the counsel to intervene in any matter affecting insurance consumers in these two lines of insurance.

“The ‘people’s counsel’ would duplicate the authority of the MIA with no added benefit to the consumer, but with greatly increased administrative and financial burdens on insurers,” she added. “This is the reason there has been a national trend to repeal these laws in the few states where they existed. The existence of a ‘people’s counsel’ would undoubtedly be a disincentive for new insurers to enter the Maryland market.”
The insurers’ advice to Ehrlich to veto HB2 is contrary to that of some Maryland doctors who also wished for stronger tort reforms but have urged him to sign the bill anyway.

The Save Our Doctors Protect Our Patients Coalition earlier this week said it was disappointed a conference committee “could not sustain the fuller measure of tort reform approved by the House.”

Still, the group described the final bill as “a step in the right direction for both doctors and patients” that “temporarily preserves access to medical care.”

“If comprehensive long-term tort reform measures are not enacted, we believe that we will be dealing with a recurrence or worsening of this crisis in the near future,” the group said in a statement.

Ehrlich has said he will veto the measure, in statements that mirror the insurers’ argument. The governor criticized the bill for not having enough insurance reform measures to have a significant impact on the cost of settling malpractice lawsuits. But it was a tax measure — repealing an exemption for HMOs from the state’s 2 percent insurance premium tax — that ensured that Ehrlich would reject the bill. He said he would veto it some time next week. However, the legislature controlled by Democrats could override the veto.

Topics Carriers Maryland

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