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Medical Malpractice Caps Benefit Insurers

Doctors and insurance companies are the most supportive groups for medical malpractice caps, claiming capping damages will result in lowered premiums. The states that have capped medical malpractice payouts have found that premiums have not been reduced.

According to the independent insurance-rating agency Weiss Ratings, a study just published found that states that do not have caps on noneconomic damages had median annual premiums for standard medical malpractice coverage that rose 36% between 1991 and 2002. Compared to that, were states with caps that had premiums rise even more at 48%. Of the nine states with flat or declining premiums in 2002, seven of the states did not have caps. Public Citizen consumer group has been continuing to find evidence that passing medical malpractice caps will not help to reduce increasing insurance premiums.

In the meanwhile, medical malpractice caps have increased insurer profits and Weiss believes, “The caps are great for insurers, their payout will be lower. In a perfect world, they would pass that savings on.” Critics of medical malpractice caps think that the “crisis” situation states are suffering can be helped by getting insurers to stabilize cycles of cutting rates then raising them when losses have been experienced. The practice of under pricing premiums is what many believe has led to the medical malpractice crisis.

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