 |
CBO: Save $54 billion on health care by cutting out the lawyers
By: David Freddoso
Commentary Staff Writer
10/09/09 4:18 PM EDT
The non-partisan Congressional Budget Office has produced a report on the savings that the government could reap if relatively painless tort reform provisions are included in the health insurance reform bill before Congress. And the results would be encouraging, if there were any chance of these provisions becoming law.
The list of reforms that CBO considered includes:
-
A reform of "joint and several liability." This means that instead of putting one "deep-pocketed" defendant on the hook for everything, each defendant would pay only his fair share according to his liability.
-
A $250,000 cap on non-economic damages.
-
A cap on punitive damages equal to $500,000 or twice economic damages, whichever is greater.
-
A claw-back of money already recovered from insurers.
-
A limit on the percentage of judgements and settlements that trial lawyers can pocket.
The CBO report cites studies that already show reduced Medicare costs in states where some or all of these liability reforms have already been implemented. The conclusion:
CBO says that the reforms would also increase tax revenues by $13 billion, as premiums drop and a greater share of employees' income becomes taxable take-home pay. The bottom line for the federal government is $54 billion over ten years, including $11 billion this year.
The marginal benefits are limited in part -- again -- by the fact that many states have already adopted some or all of the malpractice tort reforms under discussion. California, Texas and Mississippi, for example, all limit non-economic damages. Medicare and other federal programs, along with what some could call the entire "health care system," are already reaping these benefits in those jurisdictions.
But the upshot is that, given a choice between cutting back trial lawyers' profits on the one hand, and raising taxes and cutting Medicare benefits on the other (the Democrats' current plan), it would seem obvious which is the lower-hanging fruit, and which should have priority in health reform.
Follow The Examiner
