Medical Malpractice Reform and Employer-Sponsored Health Insurance Premiums

Authors

  • Michael A. Morrisey,

    1. Department of Health Care Organization and Policy, and Lister Hill Center for Health Policy, University of Alabama at Birmingham, 1665 University Boulevard, Birmingham, AL 35243-0022,
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    • Address correspondence to Michael A. Morrisey, Ph.D., Department of Health Care Organization and Policy, and Lister Hill Center for Health Policy, University of Alabama at Birmingham, 1665 University Boulevard, Birmingham, AL 35243-0022; e-mail: morrisey@uab.edu. Meredith L. Kilgore, R.N., M.S.P.H., Ph.D., is with the Department of Health Care Organization and Policy Birmingham, AL. Leonard ( Jack) Nelson, J.D., L.L.M., is with the Cumberland School of Law, Samford University, Birmingham, AL. Meredith L. Kilgore, R.N., M.S.P.H., Ph.D., and Leonard ( Jack) Nelson, J.D., L.L.M., are also with the Lister Hill Center for Health Policy, University of Alabama, Birmingham, AL.

  • Meredith L. Kilgore,

    1. Department of Health Care Organization and Policy Birmingham, AL,
    2. Lister Hill Center for Health Policy, University of Alabama, Birmingham, AL
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  • Leonard (Jack) Nelson

    1. Cumberland School of Law, Samford University, Birmingham, AL
    2. Lister Hill Center for Health Policy, University of Alabama, Birmingham, AL
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Abstract

Objective. Tort reform may affect health insurance premiums both by reducing medical malpractice premiums and by reducing the extent of defensive medicine. The objective of this study is to estimate the effects of noneconomic damage caps on the premiums for employer-sponsored health insurance.

Data Sources/Study Setting. Employer premium data and plan/establishment characteristics were obtained from the 1999 through 2004 Kaiser/HRET Employer Health Insurance Surveys. Damage caps were obtained and dated based on state annotated codes, statutes, and judicial decisions.

Study Design. Fixed effects regression models were run to estimate the effects of the size of inflation-adjusted damage caps on the weighted average single premiums.

Data Collection/Extraction Methods. State tort reform laws were identified using Westlaw, LEXIS, and statutory compilations. Legislative repeal and amendment of statutes and court decisions resulting in the overturning or repealing state statutes were also identified using LEXIS.

Principal Findings. Using a variety of empirical specifications, there was no statistically significant evidence that noneconomic damage caps exerted any meaningful influence on the cost of employer-sponsored health insurance.

Conclusions. The findings suggest that tort reforms have not translated into insurance savings.

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