Citing N.H. Med-Mal Market as Non-Competitive, Analyst Urges Prior Approval of Future Rates

July 19, 2005

The malpractice insurance market for doctors, hospitals and other medical professionals in New Hampshire is lacking competition such that a law allowing the insurance commissioner to approve any future rate hikes should be triggered, an actuary for the state said yesterday.

The insurance department’s property and casualty expert, David Withers, shared his analysis before Insurance Commissioner Roger Sevigny at a public hearing. Sevigny said he intends to decide by early September whether to accept the recommendation and begin requiring insurers to obtain permission for rate increases to assure they are not “excessive, inadequate, unfair or discriminatory.”

Malpractice insurers are now permitted to utilize new rates 30 days after filing them with the state.

According to Withers, one of the signs of a non-competitive market is the concentration of business in a single or small number of insurers. Medical Mutual of Maine currently writes about 50 percent of all physicians and surgeons and about 15 percent of all hospitals in the Granite State.

When that market penetration is combined with the market share of the state’s second largest insurer, ProSelect, about half of the entire market is controlled by two insurers, Withers reported.

While a total of 47 carriers write medical malpractice in the state, the top 20 control 97 percent of the market, he added.

Gov. John Lynch sent Sevigny a letter praising him for delving into the issue.

Lynch told Sevigny that a “stable and efficient health insurance system is of critical importance to our quality of life in New Hampshire, and our ability to attract and retain businesses to our economy.

“I applaud you and your staff for reviewing the viability and competitiveness of our state’ s market for medical malpractice insurance, and for holding a public hearing to elicit public comment on this issue. If our citizens are to maintain their trust in our healthcare system, they must be assured that our insurance system can provide adequate coverage to our medical professionals at a fair cost that reasonably reflects the risks in the New Hampshire market,” Lynch wrote.

“Our state enjoys a strong and growing economy, which makes it an attractive market for many insurance companies. We can expect and must require that those insurers who participate in this environment are willing actively to compete in all aspects of the market on a fair basis.”

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