Tax break on liability insurance proposed

Medical groups say the bill is flawed because it doesn't address the underlying causes of escalating premiums.

By Tanya Albert, AMNews staff. June 2/9, 2003.

One U.S. senator wants to let you write off part of those high medical liability premiums on your next two federal tax filings.

Under the bill offered in May by Sen. Dick Durbin (D, Ill.), the size of the deduction would vary by specialty. Family physicians, internists, allergists, dermatologists, pathologists and other physicians in general medicine would be able to deduct 10% of their liability insurance premiums from their 2003 and 2004 taxes.

Surgeons, obstetricians, anesthesiologists, neurologists and emergency physicians would be allowed to write off 20% of their cost. Hospitals and clinics could deduct 15%.

Durbin said the bill would provide physicians immediate relief while lawmakers debated a more comprehensive solution. "Even if all the tort reforms they proposed were to pass this year, doctors would not see a decrease in their premiums for three to four years," he said.

Groups pushing for comprehensive federal tort reform said they appreciate Durbin's attempt to help physicians who are facing high medical liability insurance premiums. The AMA has declared 18 states to be in the midst of a medical liability crisis that has physicians retiring early, cutting back on high-risk services or moving to other states because they can't find affordable insurance.

But the Association and others said the bill doesn't do enough.

"It doesn't address the underlying causes of the problem of escalating cost," said AMA Chair J. Edward Hill, MD. "It subsidizes the cost, but it doesn't address the reasons why the cost is escalating."