Full Story in the Rome News-Tribune

As more carriers quit offering policies in a certain market, insurance premiums rise for the businesses in that community. Kemp highlighted one example, Waffle House’s struggles to find affordable insurance in Georgia, in his State of the State address last month. Without a robust market of insurers offering liability policies, the result for restaurants, grocers and other businesses can be limited operating hours or closing locations completely.

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Now, Georgia lawmakers will attempt to limit the economic damages that can be considered in these cases to the actual expenses incurred for the procedure. Currently, it is permissible in a trial to introduce the initial charges billed by the healthcare provider. These are commonly referred to as “phantom damages” because no one ever actually pays them.

They often reflect the price on your hospital bill that is sent to your insurer rather than what the procedure actually cost the provider — or what the insurer eventually paid for the procedure. Most importantly, when considering economic damages for verdicts, these prices usually have an extra zero or two more than what the patient is expected to pay.

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Illinois enacted caps on medical malpractice damages in 2005, including $500,000 limits for plaintiffs against physicians and $1 million limits in lawsuits against hospitals. The Illinois Supreme Court declared these caps unconstitutional in 2010, citing a violation of the state’s separation of powers clause. However, a 2010 report by the Illinois Department of Insurance for this period reported a decrease of over 10% in medical malpractice premiums and an increase of five insurers offering medical malpractice insurance.

Defenders of the status quo argue that Gov. Kemp’s tort reform will merely bring increased profits for insurance carriers and corporations. Yet, competition and choice are essential if we want to ensure that the rising cost of premiums is not simply passed on to consumers.