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Louisianas Landry vetoes tort reform bill concerning collateral source doctrine

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(The Center Square) — Louisiana Gov. Jeff Landry held a news conference on Tuesday to explain his veto of House Bill 423.

HB 423 would have revised the collateral source doctrine which allows civil juries to have access to the “sticker price” of medical bills and the amount actually paid by the insurance company.

Supporters of HB 423, like the Louisiana Lawsuit Abuse Watch, say this would’ve not only kept insurance companies from paying out less, but prevented frivolous lawsuits in the name of transparency.

“In addition to creating more transparency and helping lower insurance rates, this bill would have brought more fairness and balance to our civil justice system,” LLAW director Lana Venable said in a statement regarding the veto. “Lawsuit abuse does not discriminate – everyone pays the price when the resulting costs are passed down to all of us.”

Landry said during his press conference that the reason some media and tort reform supporters oppose his veto is because they don’t understand the bill. He argued that HB 423 would take money away from responsible people who pay for health insurance, and reward those who don’t pay premiums.

“It (collateral source doctrine) protects people who go out, and who work, and who obtain health insurance,” Landry said. He went on to explain the difference in the case of an accidental medical emergency. “That (a $5,000 insurance reward) is a credit that because you have health insurance, you got. But that’s what this bill takes away from you. They said you don’t get credit for being responsible, but if you don’t have health insurance and you don’t work, you get the full $10,000. Now tell me how that’s fair.”

The governor went on to say he believes in revising the state’s civil code, and that in the six months he’s been governor he’s passed more tort reform legislation (26 bills) than any other governor in that time span. He also showed map which showed the states with a less restrictive collateral source doctrine and said those states have lower average rates.

Louisiana Association of Business and Industry President and CEO Will Green said in a statement that the Louisiana business community is deeply disappointed in the governor’s veto of HB 423.

“As we have said since its passage, HB 423 was a compromise bill that helped bring fairness, predictability and transparency to our legal system,” Green said. “The governor’s signature would have sent a resounding message to insurance carriers throughout the state and the country that Louisiana is indeed open for business as we work to fix our unstable insurance market.

“To defend his veto, the governor cherry-picked examples and pointed to other states that have litigation protections and guardrails in place that simply don’t exist in Louisiana, and therefore did not tell the whole story. While the governor has signed into law a property insurance reform package that helps bring fairness and balance back to our property insurance market, for which we are grateful, he has not yet adequately addressed the auto insurance crisis crippling the state.”