"An Act relating to claims for personal injury or wrongful death against health care providers. "
"Medical malpractice insurance companies have found Alaska uneconomic and have left the market. This has created much uncertainty and opened the door to higher rates across the board."
- Sen. Seekins
Senate Bill 67 amends AS 09.55 by adding a new section (.549). This section places a two step limit on non-economic damage awards where health care providers render services. In cases involving wrongful death or severe permanent physical impairment damages are limited to $400,000 while all other cases are limited to $250,000. This bill intends to alleviate a growing, two-pronged, crisis in Alaska's health care industry - the dearth of liability insurance carriers and the declining number of practicing physicians.
Liability insurance is one of life's absolute necessities. As drivers, we are required to have liability coverage before we get behind the wheel. As homeowners we understand the protection liability insurance provides. Now imagine if Allstate, State Farm and GEICO found the Alaska market litigiously perilous and decided to pull up stakes. What would rates do?
Health care providers, too, understand the necessity of liability coverage. The fact is, in today's world no commercial enterprise dares "go bare." But where our state's health care industry is concerned, the lack of carriers is not hypothetical - it is a reality. Medical malpractice insurance companies have found Alaska uneconomic and have left the market. This has created much uncertainty and opened the door to higher rates across the board.
These added costs of doing business are, of course, paid by every Alaskan needing medical care. But there is a much more serious problem - that being a critical shortage of physicians. The fact is, Alaska ranks near the bottom in the number of physicians per capita. Over half of Alaska's physicians exceed the age of 50. Furthermore, it gets continually more difficult to recruit new entries when other states have capped non-economic damages at or near $250,000.
The bottom line? Despite all our natural assets, Alaska is viewed as an undesirable place for medical insurance carriers to do business and, as a result, for physicians to set up shop.
This is, unquestionably, a complex issue. Yet, other states have effectively placed an upper limit on non-economic damage awards thereby providing a stable, predictable and insurable climate. Senate Bill 67 follows this national trend.
It's important to note that this legislation does not alter awards for quantifiable damages such as lost wages and medical expenses. Furthermore, it is not intended to be a silver-bullet solution to an entire range of issues facing our health care industry today. However, it does provide a step in the right direction in terms of stabilizing the medical insurance market here in Alaska and boosting our efforts to attract the next generation of physicians.