Will You Soon Be Paying a “Baby Tax” To Subsidize Doctors’ Malpractice?


New York’s Medicaid Redesign Team is considering the controversial Proposal 131. Besides putting strict caps on non-economic compensation for medical malpractice suits, the proposal would establish a birth injury fund. This fund would be financed by a surcharge paid by liability insurance companies with costs likely passed onto small businesses and any insurance consumer.

Although little has been revealed about the details of the birth injury fund there is concern because a good portion of the Medicaid Redesign Team is made up of lobbyists from hospitals and industry. Piecing together the details that are available and ideas that have been circulating there is significant concern about several aspects of the potential birth injury fund.

One possibility is a system where families would be continually fighting for funds they need to care for their newborn with not only their health insurance, but also Medicaid and then the new birth injury fund. The ongoing efforts to fight for compensation would be extremely taxing on families of injured newborns who already face significant challenges.

Another concern is the solvency of such a birth injury fund. Even if the fund is appropriately funded and established with the best of intentions, nothing guarantees that it will remain that way. The fund could be drained because of budgetary issues and become insolvent. The Birth-Related Neurological Injury Compensation Program of Virginia has faced tremendous fiscal problems for a number of years.

By its creation, the birth injury fund singles out catastrophically-injured newborns. It potentially denies those who represent the injured newborns’ interests from presenting their case to an impartial judge or jury with potentially no process for appeal. Newborns and their families should have the same opportunities for legal recourse as any other victims of medical malpractice.

Finally, it is simply unfair to shift the financial responsibility from negligent doctors and hospitals to state government and insurance consumers, essentially a “Baby Tax”. The focus instead should be on improving hospital and patient safety to prevent such malpractice from happening in the first place.

Source: Center for Justice and Democracy, “Governor’s Medicaid Team Considering New ‘Baby Tax’ to Subsidize Malpractice at Unsafe Hospitals”

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