State Supreme Court rules insurance caps unconstitutional
Medical malpractice insurance premiums are expected to shoot up in Missouri after the state’s Supreme Court has declared a longstanding cap on the premiums unconstitutional. In 2004, Missouri legislators placed a cap on medical malpractice insurance premiums. Since then, premiums have dropped by 28%. The cap also lowered a cap concerning non-economic damages in malpractice cases, making it more difficult for consumers and insurance companies to recover funds that may be vital in the attainment of additional care.
The ruling from the Supreme Court removes a so called “pain-and-suffering” damages cap of $350,000. Since the cap was placed, the state’s medical malpractice insurance premiums have dropped from $192 million in 2005 to $145 million in 2010, according to the Department of Insurance. Since the institution of the cap, insurers have been disinclined to provide coverage for a wide range of malpractice risks. Though many are interested in seeing whether the removal of the caps will lead to more coverage options, Missouri’s medical community is concerned about what the ruling could mean for patients.
The removal of the cap will allow insurance companies to raise their medical malpractice insurance premiums. While regulations are in place to mitigate the excessive increase in premiums, insurers may be able to provide adequate justification for the increases they may be seeking. Higher premiums are expected to trickle down to consumers, many of whom receive coverage through Medicare. This trickle down effect is meant to offset the potential financial losses medical institutions could experience through having to pay for higher premiums.
Missouri’s medical malpractice insurance premiums law was overturned on July 30. It is still uncertain exactly how the ruling will affect the state’s malpractice insurance and how companies will respond. The health care community remains cautious, suggesting that the insurance industry had been significantly difficult to deal with in the years before the caps were instituted.
