CBO Director Douglas Elmendorf wrote that his estimate was higher than previous CBO estimates because it included indirect savings from reducing diagnostic tests and other services that doctors use to shield themselves from exposure to lawsuits, as well as direct savings from lower malpractice insurance premiums.
The CBO’s higher savings estimate could strengthen Republicans’ and some moderate Democrats’ arguments that tort reform should be part of federal health reforms, which needs to show significant savings to pay for its expansion of coverage.
President Obama spoke favorably of tort reform in his speech before a joint session of Congress last month, saying he had asked HHS Secretary Kathleen Sebelius to "move forward" on state-based demonstration projects to test proposed tort reforms.
Various tort reforms, however, have already been initiated in many states, such as monetary caps on awards for noneconomic damages in California, Texas and Indiana.
Read CBO Director Douglas Elmendorf’s letter on tort reform (pdf).
