Gino DiCaro

CMTA seeks veto of bill resulting in increased liability insurance costs

By Gino DiCaro, VP, Communications

Capitol Update, Oct. 7, 2005 Share this on FacebookTweet thisEmail this to a friend

For many years, the state has been failing to fully fund the Medi-Cal program and many county hospitals are fighting to keep their doors open. SB 399 (Martha Escutia, D-Whittier) is the wrong solution to a legitimate problem because it would force California businesses, taxpayers, and consumers to subsidize not just the Government's underfunding of Medi-Cal, but also the increase in lawsuits and personal injury attorney fees.

SB 399 requires that when an individual on Medi-Cal is injured, the "at fault" party pay the full charge for their medical care, not the smaller amount that Medi-Cal would otherwise reimburse.

This higher payment made by all consumers of insurance would make up for the inadequate payments by the state under Medi-Cal, increase the amount attorneys can sue for medical damages and increase the amount attorneys can sue for pain and suffering.

Consequently, much of the additional money that would be required to be paid by consumers would land in the pockets of attorneys, not necessarily the public hospitals. This bill would create a clear incentive for personal injury attorneys to seek the highest medical reimbursement rate possible so that they can extract bigger settlements and verdicts and higher attorney fees - all at the expense of California businesses, taxpayers and consumers. If enacted, this misguided measure is estimated to increase liability insurance for all consumers of insurance by 10-12 percent.  We strongly encourage the Governor to veto this bill.

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