John McCain and California’s Caps

For indispensable reporting on the coronavirus crisis, the election, and more, subscribe to the Mother Jones Daily newsletter.

During the healthcare summit yesterday, John McCain hailed California and Texas for implementing damage caps in medical malpractice suits. But then he stumbled a bit and decided he actually wanted to talk only about Texas, not California. He nervously made a lame joke about California stealing Arizona’s water to cover this up, but at the time I tweeted:McCain doesn’t want to talk about California’s damage caps. Why? Because it hasn’t kept premiums down.”

And it hasn’t. We passed a law called MICRA in 1975 that limited noneconomic damages in malpractice cases to $250,000. Adjusted for inflation, that cap is now about the equivalent of $60,000. Nonetheless, its impact on malpractice premiums has been negligible. The chart below comes from the Foundation for Taxpayer and Consumer Rights, which definitely has a dog in the fight since it was founded by insurance industry scourge Harvey Rosenfield, who championed Proposition 103, an initiative that implemented state approval of insurance rates. It was passed in 1988.

Still, the results are pretty clear. After 1975, malpractice premiums continued to zoom upward, rising at an even higher rate than in other states. But after 1988 (that’s the green line for easy reference), California premiums leveled off while rates in the rest of the country continued to rise. The reason for this is pretty simple: large damage awards are actually pretty rare and don’t make up a huge proportion of total malpractice payouts. Capping them changes the picture, but it doesn’t change it that much. But it does substantially cut into trial lawyer income.

Which, of course, is the whole point. If you want to annoy trial lawyers, you should cap damages. If you really want to reform malpractice law, however, look elsewhere.

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate