As the saying goes, “a lie can travel halfway around the world while the truth is still putting on its shoes.” Well, when it comes to California’s 1975 brutal law that severely caps (at $250,000) non-economic damages for injured patients – even catastrophically-injured children – the shoes are finally on. At least in part.
Reports indicate that California’s medical industry has finally realized that the falsehoods and nonsense used to justify opposing even an small inflationary increase to this cap after nearly 50 years, weren’t working anymore. Between a threatened ballot initiative to raise the cap and more, a very smart organizing and media campaign, and some skillful lobbying by advocates, they finally gave in, agreeing to an inflationary adjustment.
Yet this law should never have come to be in the first place.
In 1974, a bunch of insurance companies in California suddenly and drastically raised medical malpractice premiums on doctors with no data to support what they were doing. During this period, J. Robert Hunter, at the time the nation’s Federal Insurance Administrator, started examining whether this premium increase was caused by some huge jump in medical malpractice claims. Working with the National Association of Insurance Commissioners (NAIC), they found that there was no jump in claims and no justification for insurers to drastically raise rates. The fault lied entirely with an out-of-control and largely unregulated insurance industry. (Learn more here.)
President Ford (and later President Carter) resisted efforts to consider a national "tort reform" bill based on this research. However, the truth didn’t stop insurance and medical lobbyists. They zeroed-in on state lawmakers, spouting their false narrative, saying, “Don’t look at us for these astronomical rate hikes– blame the lawyers, lawsuits and juries!” With this rhetoric in hand, they used their economic clout to force many states to weaken civil liability laws. And it was all done with very little scrutiny by policyholders, lawmakers, the media or the public at large.
Perhaps most famously was California’s $250,000 cap law, the Medical Injury Compensation Reform Act, or MICRA. This cap has not increased one cent from the original $250,000 limit, despite inflation that has far more than quadrupled costs (“Had the cap had been annually adjusted for inflation, it would now be $1.3 million.”) Those hurt most by this law are children, stay-at-home parents, the elderly and poor, i.e., those whose economic damages tend to be less despite the fact that they have suffered grievous injury.
Governor Jerry Brown signed the MICRA bill in 1975, and then, realizing it was a mistake, repudiated it in a public written statement in 1993. But he cowardly failed to act to change the law when he became Governor again in 2011. Tragically MICRA kept harming the most seriously injured and needy children and adults who suffer from negligent (or worse) physicians and hospitals. And it has allowed the medical establishment to try to spread this cruel law to other states and even – unsuccessfully, thank goodness - to the entire nation in federal legislation.
MICRA has had terrible consequences for many innocent people, while doing nothing to improve the affordability of liability insurance for doctors. This new deal will raise the cap to $350,000, which would gradually increase over a 10-year period to $750,000 (more for death cases). Moreover, if both a doctor and hospital are found responsible, both can be liable for these damages, which is something not allowed under MICRA. It is a very big step to righting a horrible injustice. Kudos to all involved.
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