Pennsylvania Loses Legal Battle against Medical Malpractice Insurer

Pennsylvania Capitol

Pennsylvania lost round one in the legal battle against a medical malpractice insurer. A federal judge temporarily blocked its financial demand from the insurer until the lawsuit goes to trial.

The state government wants to obtain the money to help to help close its budget deficit. Last month, Gov. Tom Wolf signed a budget-related legislation to seize $200 million from Pennsylvania Professional Liability Joint Underwriting Association (JUA)

Earlier this month, JUA filed a lawsuit  challenging the state government’s financial demand and threat to shut down its operations. In 1976, Pennsylvania created JUA as a private association. It does not receive funding from the state therefore its assets are private.

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In its complaint, JUA argued that the plan to seize its $200 million will “seriously imperil” its operations. It will not be able to fulfill its insurance coverage obligations if it complies with the state government’s demand.

Furthermore, the medical malpractice insurer described the state government’s demand as unconstitutional nationalization of a nonprofit organization.