Insurance Reform, Not Tort Reform Results in Physician Malpractice Premiums Being Reduced in Illinois
The St. Louis Post Dispatch is reporting a story announcing that a medical malpractice insurer in Illinois will actually cut physician premiums for malpractice insurance as a result of recent legislation designed to aid competition between insurers. Berkshire Hathaway's Med Pro insurer is slated to cut rates 32% statewide and 38.5% in Madison and St. Clair counties this year. It is also expected to accept up to $100 million in new premiums beginning next year. Significantly, the Post Dispatch reports that "it was not the landmark bill's caps on how much doctors and hospitals can be forced to pay in a lawsuit that apparently did the trick." It was the provisions in the bill that forced medical malpractice insurers to share comprehensive information on how they set their rates which allowed other competitors to adjust their rates. The information on how and why a 30% rate decrease could be offered to physicians came directly from the director of the state's Division of Insurance, Michael McRaith.
What Berkshire is telling us is that ... it's the availability of the data that allows them to set rates that are more competitive than they could have set before,McRaith said. "This just shows that it's insurance reform that has the capacity to lower rates and bring in competitors," said Mark Fraley, acting director of the Center for Justice and Democracy. "The caps never should have been an issue because they just don't work"