NCPA - National Center for Policy Analysis

Pennsylvania Medical Plan Angers Insurers

January 29, 2003

Pennsylvania's newly-elected Gov. Edward Rendell (D) averted a New Year's Day strike by surgeons and other medical specialists by promising bold action and persuading them to stay on duty until he took office last week. They had been protesting crippling increases in rates for medical-malpractice insurance that threatened to shut down hospitals and drive some doctors either out of state or into retirement.

But Gov. Rendell's recipe for a fix has stirred up that state's insurance industry:

  • Rendell wants to take $220 million from the surplus funds of big health-insurance companies and use the money to pay some of the runaway malpractice premiums.
  • Insurers counter that they don't even write medical-malpractice insurance, but are being asked to foot the bill.
  • The Pennsylvania Medical Society says that premium rates rose 50 percent in 2002, with another 50 percent taking effect in 2003.
  • Insurers say they have no choice but to raise rates due to record jury verdicts against doctors.

Pennsylvania is far from unique in its quandary. High malpractice premiums are forcing doctors to walk away from their practices in parts of Florida, West Virginia, Mississippi and New Jersey, at least temporarily.

Source: Bernard Wysocki Jr., "Pennsylvania Plan Makes Insurers Scream," Wall Street Journal, January 28, 2003.

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