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No doubt you have heard a great deal on your local news stations about the vigorous debate over healthcare and comprehensive healthcare reforms. Proponents on the issue say that tort reform will reduce the amount of money insurance companies have to pay out to victims of medical negligence, which, they propose, will lead to lower medical malpractice premiums for physicians, which, in turn, will lead to lower healthcare costs and health insurance premiums for all Americans. But is that the case? The American Association for Justice (AAJ) released this month a report showing that Medical Malpractice insurance company profits have gone up in all states, but at a faster rate when a state enacts caps. Insurance company profits are an average 24% higher in the 30 states with malpractice caps. The report also shows that insurance company profits are the only effect of caps on damages. In 2008, the average profit of the 10 largest medical malpractice insures was higher than 99% of the Fortune 500 companies and 35 times higher than Fortune 500 average. We encourage you to read a summary of the report provided below or in it's entirety by clicking on the link provided at the end of the summary. Report: State Tort Reforms Don't Lower Premiums For Doctors or Patients Insurance company profits 24% higher in states with severe restrictions on patients' rights Washington, DC-State tort reforms have provided a boom to insurance companies, leading to record profits while physician and patient premiums continue to skyrocket. An analysis of data from the National Association of Insurance Commissioners (NAIC) and company annual statements shows malpractice insurer profits are 24 percent higher in states with caps. In these cap states, insurers took in 3.5 times more in premiums than they paid out in 2008. In contrast, insurers in states without caps took in just over twice what they paid in claims. The findings also show absolutely no correlation between the cost of malpractice premiums and health insurance premiums. For example, Maine has the ninth lowest malpractice premiums but the fourth highest health insurance premiums. Conversely, Nevada has the third lowest health insurance premiums nationally, but malpractice premiums are the country's ninth highest, despite having a cap in place for eight years. "The data are clear: tort reform is just another insurance company handout," said American Association for Justice President Anthony Tarricone. "Insurers cried wolf and demanded tort reform, only to pocket the profits and never pass savings onto physicians or patients. While 98,000 people die every year from preventable medical errors, it's nonsensical to limit patients' rights simply to fill insurance company coffers." The report also shows how medical negligence laws were passed under false pretenses. The medical malpractice insurance industry has seen a 47 percent increase in profitability in the last 10 years. Overblown "reported" losses were used by the insurance industry to justify new measures restricting the rights of those injured by medical negligence. Finally, the report explains the dynamics of the insurance cycle and trends in premium pricing, which are well-known by analysts within the insurance industry. Remarkably, the industry's leaders are already positioning to claim another "tort crisis" and to lobby for even more severe restrictions on patients' rights in 2012. To view a copy of Insurance Company Handout: How the Industry Used Tort Reform to Increase Profits While Americans' Premiums Soared, visit http://www.justice.org/clips/Insurance_Company_Handout.pdf.
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