In 2005, three states -- Georgia, Illinois and South Carolina -- have passed laws capping medical malpractice non-economic damage awards and now 25 states have such legislation on the books. However, also this year the Supreme Court of Wisconsin ruled that the state’s 10-year old law limiting non-economic awards was unconstitutional. Other challenges are underway or being considered in Florida, Ohio and Illinois.

In response to the Wisconsin Supreme Court ruling that the state’s caps were arbitrary and unconstitutional, the state Assembly passed legislation establishing a two-tiered system of caps that would limit awards to those age 18 or older to $450,000 and awards to those younger than 18 to $550,000. A primary argument for the new legislation is that the caps’ levels are actuarially sound as determined by a medical malpractice task force, not a compromise among legislators seeking higher or lower caps, and were thus able to meet the constitutional objection of arbitrariness.

In New Jersey a program intended to address the escalating cost and lack of availability of medical malpractice insurance is being implemented. In October 2005 the New Jersey Medical Malpractice Insurance Premium Assistance Fund began to distribute subsidies to doctors in specialties with the highest medical malpractice insurance premiums. About 1,200 neurosurgeons, obstetricians and radiologists who read mammograms in the state will each receive about $11,000.

On election day, November 8, Washington State voters rejected initiatives that would have imposed caps on non-economic damages in medical malpractice suits and an initiative that would have imposed stricter discipline on careless doctors and new regulations on insurance companies.

On August 25, 2005 Illinois Gov. Rod Blagojevich signed into law Senate Bill 475 that caps non-economic damage awards at $500,000 for doctors and double that amount for hospitals. The law also requires that disciplinary actions and the outcomes of malpractice lawsuits against doctors be postedon a government Web site.

The financial results of medical malpractice insurers are improving. According to the National Underwriter Data Services, the medical malpractice combined ratio, a measure of profitability, was 109.2 in 2004, the latest data available. This means that for every medical malpractice premium dollar collected, insurers have been paying out almost 1.09 dollars in claims and expenses. This represents a significant drop from 2003, when the combined ratio was 139.0, and from the five previous years.