Supporters of medical malpractice (search) insurance reform say Texas is showing how to do it.

The state's largest medical liability insurance provider, Texas Medical Liability Trust, says it will cut the rates it charges doctors and hospitals by 5 percent on top of a previous cut of 12 percent. The provider attributes that to the $250,000 cap for "non-economic" damages for patients who successfully sue in court.

The American Medical Association (search) says that in Texas, fewer doctors are quitting because of high insurance premiums, providing more options for patients.

"It's good for doctors because it keeps them in the practice of medicine so that they can do what they're trained for, to care for their patients," said Donald Palmisano, past president of the AMA.

But opponents say the new law benefits only bad doctors and big insurance companies.

"Texas consumers were promised improvements in their quality, access and cost of health care," said Alex Winslow of Texas Watch (search). "We've seen no meaningful or appreciable benefit in those areas."

President Bush (search) has made medical malpractice reform part of his re-election campaign, but states are acting on their own already. Currently, 22 states have malpractice caps for non-economic damage, and four more will vote on some degree of reform this Election Day.

Click on the video box near the top of this story to watch a report by FOX News' Phil Keating.