If Congress enacts limits on the legal rights of patients, the biggest winner will be the property and casualty insurance industry, which has already seen its profits go up almost 1000 percent in 2003. The losers will be innocent victims with devastating injuries due to medical negligence.
The property/casualty industry’s profits rose 997% in 2003! The industry made $29.9 billion in profits last year, almost ten times the $3 billion they made in 2002. (AM Best Statistical Report, Advanced Financial Results, Property Casualty Writers 2003, April 12, 2004; Insurance Services Office & Property Casualty Insurers Association of America, “Sharp Increase in P/C Industry’s Net Income Propels Surplus Upward in 2003,” April 14, 2004).
The insurance industry’s “return on equity in 2004 is likely to soar above double digits for the first time since 1997.” (Insurance Information Institute, “Groundhog Forecast for 2004.”)
Insurers have refused to lower malpractice insurance premiums after caps and other “tort reforms” have been enacted. States that have enacted legal restrictions have seen their insurance rates continue to shoot up, even after passing severe liability limits (e.g., Florida, Nevada, Ohio, Missouri and Texas).
Legislation to place limits on medical malpractice liability hurts patients by restricting their rights to hold physicians, hospitals, insurance companies, HMOs, and drug and medical device manufacturers accountable for injuries or death resulting from negligent care. The bill will do nothing to make healthcare or medical malpractice insurance more available or more affordable.
A report by the American Medical Association’s Board of Trustees to its House of Delegates acknowledged that increasing malpractice insurance premiums were linked to the insurance underwriting cycle.
As for the claim of ever-climbing jury awards, studies of verdicts are skewed by what study sponsors leave in or leave out. The Medical Associations looked only at reported jury verdicts. The Trial Lawyers tracked all verdicts, including non-jury verdicts, through appeals, settlements and court-ordered reductions.
Why is tort reform even on the national agenda yet, at a time when insurance industry profits are booming, tort filings are declining, only 2 percent of injured people sue for compensation, punitive damages are rarely awarded, liability insurance costs for businesses are minuscule, medical malpractice insurance and claims are both less than 1 percent of all health care costs in America, and premium-gouging underwriting practices of the insurance industry have been widely exposed?
Limits on the rights of people hurt by medical malpractice will further victimize them and their families, and it will help neither patients nor doctors. The real beneficiaries will be insurance companies.
And who are the insurance companies? According to the Physician Insurers Association of America, a trade group of about 50 doctor-owned malpractice insurers, they cover about 60% of U.S. doctors in private practice and hospitals. It’s the profits of these doctor-owned insurance companies that doctors want to protect.
MLMIC insures 53% of the docs in NY. The state has set their rates for almost 20 years. MMLIC was just downgraded to a C++ because their financial status is so weak. Most insurance companies become insolvent within 2 years of being downgraded to a C category rating. What does that tell you?
The nation’s largest medical malpractice insurer, GE Medical Protective, has admitted that medical malpractice caps on damage awards and other limitations on recoveries for injured patients will not lower physicians’ premiums.
The insurer’s revelation was contained in a document submitted by GE Medical Protective to explain why the insurer planned to raise physicians’ premiums 19% a mere six months after Texas enacted caps on medical malpractice awards. In 2003, Texas lawmakers passed a $250,000 cap on non-economic damage compensation to victims of medical malpractice caps after Medical Protective and other insurers lobbied for the change.
According to the Medical Protective filing: “Non-economic damages are a small percentage of total losses paid. Capping non-economic damages will show loss savings of 1.0%.” The company also notes that a provision in the Texas law allowing for periodic payments of awards would provide a savings of only 1.1%. The insurer did not even provide its doctors that relief and eventually imposed a rate hike on its physician policyholders.
When the largest malpractice insurer in the nation tells a regulator that caps on damages don’t work, every legislator, regulator and voter in the nation should listen. Medical Protective’s rate increase and this smoking gun document prove that the insurance industry cannot be trusted on the issue of malpractice caps.
Physicians Insurance, Washington state’s largest medical malpractice insurer, announced a 7.7 percent decrease in physicians’ rates for 2005 and higher profits than the company has seen in a decade, despite the fact that the state has not passed the malpractice cap insurance companies and doctors insist is necessary to address rising premiums.
“The premium decrease by Washington’s largest malpractice insurer exposes yet another insurance company lie about the source of rising malpractice rates: damage caps do not lower doctors’ premiums because premiums move with economic cycles, not jury verdicts. Physicians Insurance net income through the third quarter of 2004 was over $10 million — more than three times its $2.8 million net income of 1996 and a record profit for the company.
Insurance premiums in Washington, and the nation, follow the insurance cycle in a boom-bust financial pattern: Insurance companies raise rates when investment income is low, then lower rates as the market improves and they want to increase the number of policyholders so more premium dollars are available to invest.
“As the insurance cycle continues its downward course, insurers in other states will begin to follow Washington and lower rates as well. However, strong rate regulation is the only way to temper the up and down swings of the insurance cycle permanently.
“Despite mounting evidence that Washington was experiencing a ‘crisis’ of insurer greed and nothing more, insurance companies and doctors continue to push a damage cap on the public. The Physicians Insurance rate decrease shows that premiums can be lowered without taking away patient rights.
If Congress enacts limits on the legal rights of patients, the biggest winner will be the property and casualty insurance industry, which has already seen its profits go up almost 1000 percent in 2003. The losers will be innocent victims with devastating injuries due to medical negligence.
The property/casualty industry’s profits rose 997% in 2003! The industry made $29.9 billion in profits last year, almost ten times the $3 billion they made in 2002. (AM Best Statistical Report, Advanced Financial Results, Property Casualty Writers 2003, April 12, 2004; Insurance Services Office & Property Casualty Insurers Association of America, “Sharp Increase in P/C Industry’s Net Income Propels Surplus Upward in 2003,” April 14, 2004).
The insurance industry’s “return on equity in 2004 is likely to soar above double digits for the first time since 1997.” (Insurance Information Institute, “Groundhog Forecast for 2004.”)
Insurers have refused to lower malpractice insurance premiums after caps and other “tort reforms” have been enacted. States that have enacted legal restrictions have seen their insurance rates continue to shoot up, even after passing severe liability limits (e.g., Florida, Nevada, Ohio, Missouri and Texas).
Legislation to place limits on medical malpractice liability hurts patients by restricting their rights to hold physicians, hospitals, insurance companies, HMOs, and drug and medical device manufacturers accountable for injuries or death resulting from negligent care. The bill will do nothing to make healthcare or medical malpractice insurance more available or more affordable.
A report by the American Medical Association’s Board of Trustees to its House of Delegates acknowledged that increasing malpractice insurance premiums were linked to the insurance underwriting cycle.
As for the claim of ever-climbing jury awards, studies of verdicts are skewed by what study sponsors leave in or leave out. The Medical Associations looked only at reported jury verdicts. The Trial Lawyers tracked all verdicts, including non-jury verdicts, through appeals, settlements and court-ordered reductions.
Why is tort reform even on the national agenda yet, at a time when insurance industry profits are booming, tort filings are declining, only 2 percent of injured people sue for compensation, punitive damages are rarely awarded, liability insurance costs for businesses are minuscule, medical malpractice insurance and claims are both less than 1 percent of all health care costs in America, and premium-gouging underwriting practices of the insurance industry have been widely exposed?
Limits on the rights of people hurt by medical malpractice will further victimize them and their families, and it will help neither patients nor doctors. The real beneficiaries will be insurance companies.
And who are the insurance companies? According to the Physician Insurers Association of America, a trade group of about 50 doctor-owned malpractice insurers, they cover about 60% of U.S. doctors in private practice and hospitals. It’s the profits of these doctor-owned insurance companies that doctors want to protect.
MLMIC insures 53% of the docs in NY. The state has set their rates for almost 20 years. MMLIC was just downgraded to a C++ because their financial status is so weak. Most insurance companies become insolvent within 2 years of being downgraded to a C category rating. What does that tell you?
For purposes of accuracy MLMIC’s Best Rating is B- not C++.
The nation’s largest medical malpractice insurer, GE Medical Protective, has admitted that medical malpractice caps on damage awards and other limitations on recoveries for injured patients will not lower physicians’ premiums.
The insurer’s revelation was contained in a document submitted by GE Medical Protective to explain why the insurer planned to raise physicians’ premiums 19% a mere six months after Texas enacted caps on medical malpractice awards. In 2003, Texas lawmakers passed a $250,000 cap on non-economic damage compensation to victims of medical malpractice caps after Medical Protective and other insurers lobbied for the change.
According to the Medical Protective filing: “Non-economic damages are a small percentage of total losses paid. Capping non-economic damages will show loss savings of 1.0%.” The company also notes that a provision in the Texas law allowing for periodic payments of awards would provide a savings of only 1.1%. The insurer did not even provide its doctors that relief and eventually imposed a rate hike on its physician policyholders.
When the largest malpractice insurer in the nation tells a regulator that caps on damages don’t work, every legislator, regulator and voter in the nation should listen. Medical Protective’s rate increase and this smoking gun document prove that the insurance industry cannot be trusted on the issue of malpractice caps.
The Medical Protective document can be downloaded from: http://www.consumerwatchdog.org/insurance/rp/rp004689.pdf
Physicians Insurance, Washington state’s largest medical malpractice insurer, announced a 7.7 percent decrease in physicians’ rates for 2005 and higher profits than the company has seen in a decade, despite the fact that the state has not passed the malpractice cap insurance companies and doctors insist is necessary to address rising premiums.
“The premium decrease by Washington’s largest malpractice insurer exposes yet another insurance company lie about the source of rising malpractice rates: damage caps do not lower doctors’ premiums because premiums move with economic cycles, not jury verdicts. Physicians Insurance net income through the third quarter of 2004 was over $10 million — more than three times its $2.8 million net income of 1996 and a record profit for the company.
Insurance premiums in Washington, and the nation, follow the insurance cycle in a boom-bust financial pattern: Insurance companies raise rates when investment income is low, then lower rates as the market improves and they want to increase the number of policyholders so more premium dollars are available to invest.
“As the insurance cycle continues its downward course, insurers in other states will begin to follow Washington and lower rates as well. However, strong rate regulation is the only way to temper the up and down swings of the insurance cycle permanently.
“Despite mounting evidence that Washington was experiencing a ‘crisis’ of insurer greed and nothing more, insurance companies and doctors continue to push a damage cap on the public. The Physicians Insurance rate decrease shows that premiums can be lowered without taking away patient rights.