Wednesday, January 26, 2005

When Maryland Democrats overrode Gov. Robert L. Ehrlich’s veto of a medical-malpractice insurance-reform bill, which included a tax on health maintenance organizations (HMOs), earlier this month, House Speaker Michael E. Busch gushed, “I think the citizens of Maryland were the winners.” And what exactly have Marylanders won? An increase on their HMO premiums that will cost families about $200 a year. In the slow-moving train wreck that has defined Maryland tort reform recently, HMOs did the most unsurprising thing of all in response to the 2 percent tax hike: They have passed the costs onto their customers.

Meanwhile, Mr. Ehrlich is busy saying “I told you so.” Indeed he did. The crisis began last year when state regulators authorized the Medical Mutual Liability Insurance Society of Maryland — the state’s largest insurer of doctors — to increase its malpractice insurance premiums yet again by 33 percent. With doctors threatening to quit their practice or leave the state, the Republican governor’s response was to overhaul the state’s entire medical-malpractice infrastructure, beginning with a state subsidy of their premium increase. Mr. Ehrlich’s bill earmarked $30 million from the state’s general fund to cover the increase, as well as supply $18.5 million from Medicaid reimbursements, a sum that would have been matched dollar for dollar by the federal government.

Not good enough, said state Democrats, who in turn proposed their tax increase. At a special session of the General Assembly last month, Democrats ignored Mr. Ehrlich’s objections and passed their version. “This is not just a good bill,” said Senate President Thomas V. Mike Miller with hyperbole approaching the ridiculous. “It’s a great bill.” Hardly. Time and again, Mr. Ehrlich warned that the bill “hinges on a harmful tax that will serve to increase the cost of health care.” And so it has.

Not surprisingly, most Maryland doctors groups, including the Maryland Hospital Association, were in favor of the Democrats’ proposal. While the governor’s bill would have covered a portion of their premium increase, the Democrats were offering a full subsidy. Still, it’s extremely short-sighted of the doctors, who, more than anyone else, understand the need for tort reform, to have taken the easy money. The Democrats’ bill stripped away almost all of Mr. Ehrlich’s true reform provisions. For instance, Mr. Ehrlich wanted to cap noneconomic damages at $500,000; limit lawyers’ fees and allow malpractice awards to be paid out over several years; impose a “three-strikes” provision to discipline lawyers who file frivolous lawsuits; and require the losing side to pay the cost for litigation — all of which was missing in the final bill. Until real tort reform is passed, there’s no reason to believe that insurance companies won’t just increase premiums again next year.

But don’t tell that to Maryland Democrats, who were busy all day yesterday blaming everyone but themselves for the tax hike. Feigning shocked indignation, Senate President Thomas V. Mike Miller, a trial lawyer himself, blamed state insurance commissioner Alfred W. Redmer for allowing HMOs to pass along the extra cost. We’ll let our readers decide which is worse: The Democrats’ complete ignorance of basic economics or their refusal to accept responsibility for a mess they created.

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