Indiana has one of the most protective statutes in the nation that protects medical providers from lawsuits. We adopted comparative fault in 1985 and former Governer “Doc” Bowen wrote the medical malpractice act which started out making doctors only liable for about $100,000 in damages. The limits are higher now, but there are limits. Additionally, no one can sue a medical provider in Indiana until he/she submits to a medical review panel of three providers who will more than likely determine that no negligence existed. This is a good law and provides most of the needed protections to keep medical costs low.
The real issue is the what the insurance company does with its investments and how they write their policies. Insurance companies make their money not simply on premiums, but on the returns on their investments. In the 1980s and early 1990s, the entire industry was caught up in the Michael Milken style junk bond business. After this debacle which cost them billions, they began looking for a scape goat and pointed to “tort reform.” Michigan has no fault tort reform, and I can say that my car insurance rates were not cheaper in Michigan when I was in school there than they are in Indiana to any measurable degree.
Additionally, the insurance industry is now suffering because they wrote “junk” policies. Perhaps the first bridge we should look at is examining what practices the insurance companies are engaged in. If it appears that they are making irrational, risky investments, then perhaps we should address that issue first.
