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Debt Deal Would Cut CLASS, Seek MPLI Savings

BESTWIRE

WASHINGTON, D.C. -- A proposal to end the debt ceiling stalemate calls for abolishing a long-term-care program passed as part of the Affordable Care Act and institute medical professional liability insurance reforms.

The plan advanced by a bipartisan "Gang of Six" identifies medical liability reforms as part of budget savings, but a draft memo circulating through Washington is short on specifics. It discusses only "an unspecified amount through medical malpractice reform."

GOP lawmakers have sought to implement reforms and President Barack Obama has signaled support for the concept. A bill awaiting a vote by the full House of Representatives -- HR 5, the Help Efficient, Accessibly, Low-cost, Timely Healthcare Act -- includes a $250,000 cap on non-economic damages, a ban on subrogation by collateral sources, a sliding-scale fee schedule for attorney contingency fees and periodic payments of future damages. The bill limits punitive damages to "instances where a person acted with malicious intent or deliberately failed to avoid injury (BestWire, May 5, 2011).

"We are pleased that these Senators, along with several experts, have concluded that [MPLI] reform will reduce our national debt," PIAA President Lawrence Smarr said in a statement.

There is a good reason for a lack of specifics in the memo: real savings are unlikely, Consumer Watchdog Washington Director Carmen Balber said in a statement. She pointed to a Congressional Budget Office study that predicted just a 0.5% savings in health care costs. Also, she said, medical errors do add to the federal deficit.

The proposal would also repeal the Community Living Assistance Services and Support Act, a national, voluntary insurance program slated to become available in late 2012. It would provide an average benefit of no less than $50 per day for long-term care services, such as at-home care (BestWire, Oct. 12, 2010).

Contact Sean P. Carr, Washington Bureau Manager: sean.carr@ambest.com