October 12th, 2009
11:26 AM ET
13 years ago

Tort reform could save $54 billion, report says

WASHINGTON (CNN) - The Congressional Budget Office is now estimating that limits on medical malpractice lawsuits - reforms favored by many Republicans - could save the government as much as $54 billion over the next ten years.

The government spends about $2.5 trillion on health care every year.

A tort reform package that includes caps on jury awards of $500,000 for punitive damages and $250,000 for "pain and suffering" damages would lower liability insurance premiums by about 10 percent, according to a report from the non-partisan CBO issued late last week.

Such laws would lower expenditures on government programs like Medicare and Medicaid by roughly $41 billion, according to the report. An additional $13 billion would be gained from taxable wages over ten years as employers reduce the amount they spend on health care.

The research was revealed in a letter sent Friday from CBO director Douglas Elmendorf to Utah Sen. Orrin Hatch, a Republican who has raised questions about how much malpractice reform would save.

But the reform package outlined in the report seems unlikely to pass, since the White House opposes capping jury awards.

Two Democratic senators told CNN's "State of the Union with John King" on Sunday that regulating malpractice lawsuits is a flawed solution.

"I don't think the way to go is to limit the rights of Americans who are injured by negligent or intentional conduct," Pennsylvania Sen. Bob Casey told CNN. "A $250,000 cap on damages, in my humble opinion, is insulting to our system of justice."

Michigan Democratic Sen. Debbie Stabenow suggested that the Republican approach to malpractice reform was too simplistic. She said damages caps imposed in Michigan had not stemmed increases in the malpractice insurance rates paid by doctors.

- CNN's Martina Stewart contributed to this story

Filed under: Bob Casey • Health care
soundoff (23 Responses)
  1. ICARE

    I totally disagree with the cap. It needs to be at least 3 million dollars. It needs to be enough so that the individual can retire and not have to worry about how to provide for the family. The minimum needs to be 3 million dollars. 250K will make them homeless.

    October 12, 2009 12:32 pm at 12:32 pm |
  2. www.firedoglake.com

    And what does the CBO say that the government can save between tort reform AND a strong public health insurance option that will be available to all Americans?

    Only a strong public health insurance option can create real competition, get costs down, and force the private insurers to treat their customers more fairly.

    October 12, 2009 12:36 pm at 12:36 pm |
  3. John

    This is the best the GOP can do. Tort Reform. Talk about fighting windmills.

    In the meantime, the GOP obstructs any meaningful healthcare insurance reform, spreads lies, fear, exaggerations, and anything else that will stir up the conservative base, all with the goal of preventing any of their lobbyist contributor (Insurance Companies, Drug Companies, etc.) for losing their power over the American people.

    The GOP's mantra... Pay no attention to man behind the curtain.

    To the Democrats – Grow a Set, and GET THIS THING PASSED, INCLUDING A PUBLIC OPTION.

    October 12, 2009 12:38 pm at 12:38 pm |
  4. Idiot_Pelosi

    Spin this White House.

    We know the Trial Lawyers were BIG contributors to the OBOZO campaign..........

    Yep, let's see if OBUMMER does what is good for the American People.

    I bet NOT.

    October 12, 2009 12:38 pm at 12:38 pm |
  5. Clay

    Just another republican attempt to keep money out of the hands of the people who deserve it and put it back into the hands of those who crashed our economy. On the one hand the republicans decry paying taxes and taking money out of the people's hands, yet they support taking money from people who have been the victim of medical malpractice. I guess that once the system has screwed you thoroughly you aren't considered a person anymore.

    October 12, 2009 12:40 pm at 12:40 pm |
  6. Bob O'Neill

    Headline is wrong–$54 Billion, not million. We should have tort reform under any plan to improve health care.

    October 12, 2009 12:40 pm at 12:40 pm |
  7. Larry

    How much would you want in compensation for a doctor removing your one "good arm? $250K doesn't seem like enough. Tort reform is a red herring. That money "saved" would come from somewhere – the agrieved! That's plain wrong in my view.

    October 12, 2009 12:42 pm at 12:42 pm |
  8. Dale

    Tort reform... good idea. This is the next step after reigning in Big Insurance.

    October 12, 2009 12:42 pm at 12:42 pm |
  9. machtim akannah

    The fact is they just don't know. How can multiple sources add up the same column of numbers and get answers that are so far apart. The answer lies in the agenda of the parties doing the addition. The two democratic senators are un-named. Could it be that they are lawyers? or that they are supported by lawyers? I notice that a republican senator, Orin Hatch, is named regarding his comments on malpractice reform. Senator Stabenow (democrat) said the Republican approach to malpractice is too simplistic. Maybe it is, but what is the Democratic approach? If either side told the truth, their tongues would crack off.

    October 12, 2009 12:43 pm at 12:43 pm |
  10. James

    Don't count on it happening since the Democrats would rather the whole country lose that hurt the lawyers or the unions. Major reason I left the Democratic party – lately worse than the Republicans and definitely more corrupt.

    October 12, 2009 12:43 pm at 12:43 pm |
  11. Doug, New Jersey

    No Tort reform with libs in power.

    Face the facts, the average Democrat in America thinks that making millions from fake lawsuits is a more noble way of getting rich than starting a small business, taking the risk and working 80 hour weeks for years before you turn a profit.

    Since this is how a majority of Democrats think, it is beyond silly to ever think that something good could become of a Democrat.

    October 12, 2009 12:45 pm at 12:45 pm |
  12. huh

    Is it 54 million or 54 billion? Either way, its funny that there is no mention that 95% of that expenditure goes to defense attorneys to deny injured persons their rightful compensation. Defense attorneys, not plaintiffs are responsible for astronomical legal costs. How many worldwide plaintiff's law firms with 10000 pluss attorneys are there? None. How many defense law firms meet that criteria? Check out the AmJur top 1000 law firms for starters.

    October 12, 2009 12:46 pm at 12:46 pm |
  13. Kris

    Rush, is EVERYTHING wrong in this country. He would have to quit popping pills, take a bath and lose 50 lbs just to be considered a Sober Fat Slob! He pipes his mouth off at every turn. He is about as useful ass Ann Coulter. Remember when he got his fat behind busted for popping pills the Republican Leadership said “we should lift him up in prayer”. He is a complete joke.

    October 12, 2009 12:46 pm at 12:46 pm |
  14. Eric

    So if i make stuff with my hands for a living and instead of removing a tumor from my hand you remove my hand. I'm pretty sure i'd be quite ticked off and loosing a body part because you screwed up is worth a lot more then 750,000 bucks. How can you put a max price on malpractice suits? I hope whoever votes for this accidentally gets both their legs removed then let's see if they think 750,000 is enough for ruining their life.

    October 12, 2009 12:46 pm at 12:46 pm |
  15. Lisa B

    Punitive damages should NOT be capped. If a jury determines that punitive damages are appropriate in a case, then what is punitive should be based on the facts of each individual case. $500,000 would not be punitive to many corporations. If there is a cap, what is the disincentive to irresponsible conduct? This proposal is anti-consumer (that's you and me and Joe the Plumber) on its face.

    October 12, 2009 12:46 pm at 12:46 pm |
  16. The Real Tom Paine

    It would be interesting to see if Senator Hatch bothered to contact the CBO for any potential savings from any of the Democratic plans. I doubt Orrin bothered to do that, since it would mean thinking outside of the box.

    October 12, 2009 12:47 pm at 12:47 pm |
  17. Randolph Carter, chairman of the death panel

    So let's say a negligent doctor cripples me for life. Do you think $750k is enough to support me and pay for any kind of continuing care for the rest of my life? If you do, you're nuts. Let's say I've got 30 years left. That's $25k/yr. That ain't even enough for a healthy person to live on. Maybe the thing to do is set a cap at whatever it takes to maintain your current lifestyle, + all medical expenses. Also, CNN, I'm sure you intended the headline to read $54 Billion with a B. Have a nice day!

    October 12, 2009 12:49 pm at 12:49 pm |
  18. mike

    tort reform is great UNTIL you become the victim then the story will change there would be no need for tort reform if the doctors were not forced to see so many patients to get paid from the insurance companies
    just ask the people in the medical field the ones that take care of the patients not the ones who profit from them

    October 12, 2009 12:52 pm at 12:52 pm |
  19. Ethan

    As Sen Casey says, a cap on awards for damages is INSULTING to people whose lives have been changed for the worse due to medical error.

    But the main reason it shouldn't be included in the bill is because it doesn't reform health care!

    It may be worthwhile for STATES to look into tort reform if they think it is important, but it does *NOT* belong in the health care reform bill because it does NOT reform health care. Simple!

    October 12, 2009 12:53 pm at 12:53 pm |
  20. Brian

    Amazing the medical profession wants a cap on jury awards for medical malpractice, will the same apply for things like my home and auto insurance? I have to carry several million dollars of coverage on my farm, home and car insurance policies. If they are going to put a cap on medical it should apply to all personal/civil lawsuits. Then we could all lower our insurance costs.

    I don't have a problem with putting a cap on, but I think the offending medical personnel should also be fired and not allowed to simply move their practice to a new locaton and hurt someone else again.

    October 12, 2009 12:54 pm at 12:54 pm |
  21. Terry from West Texas

    The Texas Legislature has already passed that law in Texas. Damages are capped at $250,000. A recent study concluded that the cap has had ABSOLUTELY NO IMPACT ON MEDICAL COSTS in Texas. Are you people going to be led down the garden path again?

    Fool me once, shame on you. Fool me twice, shame on me. Fool me 10,000 times over 50 years, I must be a Republican voter.

    October 12, 2009 12:55 pm at 12:55 pm |
  22. Lynne

    "could" means that no one knows. The one thing that is very clear is that insurance companies, banks, big business own America as they flaunt any attempt to reduce their outlandish profits and bonuses

    Nothing Congress does, and that is very little, to help the shrinking middle and working classes is circumvented by the rich who have bought enough "lawmakers" to do as they please.

    October 12, 2009 12:56 pm at 12:56 pm |
  23. Party Purity will never bring Political Power!

    It may lower medical costs, but the savings do NOT get passed onto the individual paying premiums.

    TX has tort reform and our premiums are going up almost 10% here.

    October 12, 2009 12:58 pm at 12:58 pm |