Scroll Down Scroll Down

California’s Proposition 46 – A Failed Attempt at Undoing the Original Tort ‘Reform’

California’s Proposition 46 – A Failed Attempt at Undoing the Original Tort ‘Reform’

California’s Proposition 46 was soundly defeated on Nov. 4 with 67 percent of the roughly five million votes cast against. California was the trailblazer in what is now known as ‘Tort Reform’ when its Medical Injury Compensation Reform Act (MICRA) was passed in the mid-1970s in the midst of a medical malpractice insurance premium crisis.  MICRA’s key provision was to impose a $250,000 cap on non-economic damages.  That cap has remained in place ever since.

Proposition 46 sought to:

  • Raise the non-economic damage cap from $250,000 to $1.1 million and add an inflation adjustment such that the dollar amount would increase with inflation over time;
  • impose mandatory drug testing on physicians; and
  • require physicians to consult a state prescription drug history database prior to prescribing certain controlled substances

Presented for your consideration are some facts about the measure, the insurance industry and California’s caps as compared to those in other states:

Campaign Contributions / Spending on Prop 46

Approximately $9.6 million was spent by proponents of Prop 46. [1]

The majority was donated by attorney PACs and law firms.  Major donors included:

  1. Consumer Attorneys Issue PAC ($1.1 million)
  2. Consumer Attorneys of California Initiative Defense PAC ($1 million)
  3. No other single donor contributed more than $275,000

Approximately $53.6 million was spent by opponents of Prop 46. [2]

The majority was donated by the Medical Malpractice Insurance industry.  Major donors included:

  1. The Doctors Company ($10million);
  2. Norcal Mutual Insurance Company ($10 million)
  3. Medical Insurance Exchange of California ($5 million)
  4. Kaiser Foundation ($5 million)
  5. The Dentists Insurance Company ($1.6 million)
  6. The Mutual Risk Retention Group Inc. ($1 million)

Med-Mal Insurance Profitability

Medical Malpractice insurance has been among the most profitable types of coverage as compared to other lines of property/casualty insurance for the past several years.[3]

Note:  The lower the percentage listed, the greater the profitability.  Notice that the mortgage and financial guaranty segments remain the most unprofitable given the recent housing crisis leading to significant insurance claims.

A potential consequence of its profitability, the medical malpractice insurance market has undergone significant consolidation over the past decade.  The Doctor’s Company, the largest medical malpractice insurance carrier in the U.S. and the largest contributor to defeat prop 46, has spent in excess of $1 billion acquiring more than 8 other medical malpractice insurance carriers over the past decade[4].

Non-Economic Damage Caps by State

California is the fourth most expensive state to live in according to a recent CNBC study.[5]  By contrast, the non-economic damage caps initiated by MICRA in 1975 are the lowest of any in the U.S.  While caps and specific rules regarding their application vary by state, the vast majority of states that have instituted such caps, are greater than the $250,000 cap currently in place in California.  It might surprise many Californians to know that the maximum non-economic damage awards mandated by statute are more than $700,000 in places like Tennessee, Wisconsin and Maryland and $500,000 in states like Mississippi, Florida, North Carolina and the Dakotas. 

Several states which legislated non-economic damage caps such as Illinois, Georgia and Missouri had those laws overturned in 2010 as they were deemed unconstitutional by high courts in those states.

About AMFS

The medical expert witness partner for attorneys serious about building a winning case

AMFS is your trusted source for highly-qualified medical expert witnesses. After pioneering the field nearly three decades ago, we’re continuing to redefine medical expert witness services by providing value far beyond a referral alone.

Our Physician Medical Directors know what it takes to build a strong case. Our medical expert witnesses leave no doubt. And our case managers streamline billing and logistics every step of the way, letting you focus on what you do best: constructing your winning case. Explore why AMFS clients expect more from their medical expert witnesses—and get it.

Explore Our Services

29
Years in
Business
Trust the nation’s most comprehensive medical expert witness network, cultivated over three decades in business.
212+
Medical
Specialties
With AMFS, there’s no medical specialty too rare and no case too tough. Experience expertise in action.