Consumer advocates and trial attorneys said a state proposal to cap malpractice awards takes away a key protection for patients – and wouldn’t save the state budget any money.

Medicaid – whose multi-billion dollar budget Governor Andrew Cuomo is trying to trim -- doesn’t actually pay malpractice claims. But hospitals and doctors for years have said they need "relief" from malpractice suits. They rarely pay the actual damages, but their costly malpractice insurance coverage does, and premiums have steadily increased.

The effects of malpractice caps on insurance premiums has long been in dispute.

Stephen Younger, president of the New York State Bar Association, said capping damage awards doesn't necessarily mean hospitals and doctors will have cheaper malpractice insurance.

"We've looked at the states where this has been put into place, for example in Texas," Younger said. "Texas adopted caps. Have insurance rates gone down? No. They haven’t gone down one cent."

Consumer advocates and attorneys argue that damages lawsuits are among the strongest ways to protect patients and pay for long-term care when something goes very wrong.

Hospitals and doctors say such claims lead to more and more costly "defensive medicine," such as unnecessary tests.

Younger said hospital groups got the limit in malpractice awards as a trade-off for accepting lower payments from Medicaid.

The state's two main hospital trade groups have long said high malpractice awards and insurance coverage are among the top drivers of high treatment cost.