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MICRA Modifications May Remove Medical Malpractice Settlement Caps

When it comes to medical malpractice, a single piece of legislation rarely affects the entire field at once. Many legislative works cover specific conditions or types of malpractice, not the concept as a whole. That’s why a new California ballot measure just approved for 2022 is so important.

The ballot measure is intended to modify the Medical Injury Compensation Reform Act (MICRA). This law limits the amount of damages victims can receive after a successful lawsuit. The ballot measure comes in the wake of significant media attention to California malpractice cases. Should MICRA officially be adjusted, victims around California will have the ability to receive significantly higher compensation for their pain and suffering. Here’s what you need to know about MICRA, the new ballot measure, and how it may affect you.

What Is MICRA?

MICRA stands for the Medical Injury Compensation Reform Act of 1975. This law, put in place more than 46 years ago, was instituted to put a cap on the pain and suffering damages that consumers can receive from a medical malpractice lawsuit.

The cap was placed at $250,000 of pain and suffering damages per case. The cap has remained untouched since, despite inflation. If the MICRA cap had been adjusted for inflation appropriately over the past four decades, it would now be more than $1.2 million. However, it has not been touched since it was first instituted, which has had significant impacts on malpractice victims.

The History of MICRA

MICRA was first instituted in California by Governor Jerry Brown. At the time, there was a perceived crisis in the insurance industry regarding medical malpractice lawsuits. According to insurance companies at the time, these lawsuits were on the rise, and victims were receiving unfairly high settlements. According to insurance companies like Argonaut, these settlements were draining capital reserves and forcing them to raise physicians’ insurance premiums.

MICRA was a response to this perceived crisis. The goal of the Act was to put a cap on non-monetary damages to prevent insurance premiums from skyrocketing. The problem was that the situation was nowhere near the level that insurance companies portrayed in their reports.

Reports by both the federal and state governments found that medical malpractice insurance costs had been rising for doctors. However, these reports did not find that limiting lawsuit damages was the path to follow. They also did not find that there was a trend of frivolous or unjust malpractice damage awards. So why were costs rising?

It was because of certain insurance companies’ poor financial habits. One specific insurance company, Argonaut, had made unwise investments and lost a significant amount of capital during the stock market crash of 1973-74. When the company then chose to raise malpractice insurance limits nearly 400% in 1975, it caused an industry-wide panic. It became a large enough problem that MICRA was signed into law in a special session specifically to resolve it, all because one company was struggling to survive an economic downturn.

Since the institution of MICRA, malpractice insurance and lawsuits have been regulated in many other ways. However, the Act has not been significantly changed in all the years since. What started as one company’s poor financial management has continued to impact California malpractice victims ever since.

The State of the Law Today

In the wake of the media furor around medical malpractice in California, MICRA has returned to the spotlight. The ballot measure is the first such vote since 2014, where a similar bill failed. The new measure won’t repeal MICRA entirely, as the bill does contain additional regulations that protect consumers. Instead, it would essentially eliminate the cap on damages.

The measure is still months away, but it’s already picking steam. Millions of dollars have been raised in campaign spending, both by patient advocates working to protect victims and by medical industry opponents who want to maintain the current law. The fate of the Act and the damages cap is yet to be seen. Still, if the cap is removed, it will have significant impacts on victims of medical malpractice.

How the Changes May Impact You

The MICRA cap was initially put in place with the justification of protecting physicians. Today, it could be argued that it affords doctors too much protection. Why? It’s due to how medical lawsuits are handled.

In a medical malpractice case, juries can award two main types of damages: economic and non-economic damages. Economic damages are relatively clean-cut. They consist of things like medical bills and wages lost because the victim couldn’t work. These damages can be calculated to determine how much actual money the victim lost.

Non-economic damages are the type MICRA limits. You can’t easily put a number on “pain and suffering,” after all. One justification for the Act was the supposed rise in awards of frivolously high pain and suffering damages. However, by removing the potential for these high awards, the Act also gives bad doctors and insurance companies a shield that protects them from financial consequences.

Essentially, MICRA makes it too easy for dangerous doctors to stay in business. If malpractice had worse consequences, medical professionals would be less likely to act carelessly and harm patients. Should the cap be eliminated, all California patients will be safer.

That’s not all. Malpractice victims are also harmed by the Act. It prevents them from receiving the total amount of compensation that juries may otherwise award them. If the ballot measure succeeds, patients like you who’ve been hurt by their medical team would be able to receive a just award for their pain and suffering.

In Summary

MICRA has put limitations on the potential compensation patients like you may receive for too long. It’s a measure that benefits insurance companies at the expense of victims. The ballot measure intended to end the damages cap is a valuable tool that you can use to fight back against greedy insurance companies.

In the meantime, if you’ve already suffered medical malpractice, you don’t need to fight alone. Reach out to an experienced medical malpractice attorney to get the help you need. They can help you receive the compensation necessary to get back to your everyday life without having to struggle through the legal system on your own.

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