In 2003, the state of Texas approved, through a voter ballot initiative, to peg the value of the non-economic losses of a loved one at only $250,000. As a parent, relative, or even human being, this seems patently ridiculous, but according to legal theory in the state of Texas, a parent who has wrongfully lost their child due to any number of negligent actions, can in fact, only obtain $250,000. For example, an infant wrongfully dies at the hands of a negligent doctor and the grieving parents file a wrongful death suit. Given the zero income capability of the child, minimal funeral expenses, and the Texas malpractice caps, this child’s life is only worth $250,000 in any wrongful death suit award.
According to Texas medical malpractice limits, the cap for non-economic damages in medical malpractice suits is firmly ceilinged at a quarter of a million dollars. Granted, an individual that suffers loss of income due to medical malpractice can sue for economic damages, since they can prove their income earning potential with recent tax and earnings information. Nevertheless, what about a child, since they hadn’t gotten around to filing any income reports by the early age of their death, sorry, $250,000 is all a parent can receive. Unfortunately, the dead infant example, as crass and out there as it may seem, is actually very real according to an investigative piece by a Fox News affiliate in Dallas.
According to the report, a family decided to remove their infant son from life support. The infant had, in fact, been relegated to the life support due to a preventable medical error. After some legal litigation, the parents soon realized the non-economic caps for damage awards would be significantly less than the cost of continuing with their suit. Essentially, a dead baby is worth nothing unless it was already earning an income in the state of Texas, and for the parents, well, the life altering pain is meaningless in assessing damages as well.
One must ask then, what was the cause of the residents of the state enacting such harsh and unfair laws. Were there significant abuses of the legal system that led to multi-million dollar awards for minimal injuries, which are sometimes reported in the media? According to one study, the rising insurance premiums in the state were not in fact related to larger judgment awards for medical malpractice cases. In fact, the insurance carriers themselves were to blame for the media hype, because essentially, no significant changes had occurred.
Essentially, according to the FOX news piece, tort reform caps was to blame for the higher rates experienced by consumers and medical professionals. Reductions in rates in the state of Texas from 1996 to 2000 causes insurance companies to lose nearly 3 billion dollars in revenue, but as soon as the legislation expired, insurance companies skyrocketed rates to compensate for lost earnings in the past four years. To explain the rising rates, insurance companies used tort trial lawyers as a scapegoat. With copious politicking and press campaigns, Proposition 12 made it to the ballot and was voted into law in November of 2003. Now, according to the insurance companies, they can finally offer lower rates.
However, the long-term analysis of their numbers simply does not add up, according to the Austin Business Journal. The already inflated rates as of 2003 did dip slightly after the passing of the legislation, but in essence, the rates were still high. From 2004 to 2008, rates did drop 31%, but that was only after from 2000 to late 2003 the rates increasing 148%. In the most simple form, tort reform initiatives in Texas took away nearly three billion dollars in income from insurance companies in the late 1990’s, and in turn, these companies attempted to make up lost ground by spiking rates after the legislation regulating rates expired.