Insurer cuts doctors' premiums due to insurance law changes, not "cap" on damages, state officials say

 
For Immediate Release
October 13, 2006
Contact: Mark Fraley
            312/644-8442      
Insurer cuts doctors' premiums due to insurance law changes, not "cap" on damages, state officials say
Further proof of the travesty of last year's law limiting compensation for injured patients
Chicago, IL - The Illinois Division of Insurance announced today that an Illinois malpractice insurer, Berkshire Hathaway’s MedPro, will be expanding its coverage and cutting premiums for doctors by more than 30 percent. According to state officials, this is made possible because of new insurance reforms enacted by Illinois lawmakers last year, and not the cap on compensation for patients that was enacted at the same time.  The law requires malpractice insurers to disclose data on how to set their rates.  This, according to Michael McRaith, director of the state’s Division of Insurance allows MedPro to “set rates that are more competitive than they could have set before.”
The consumer group, Center for Justice and Democracy-Illinois said the effectiveness of Illinois’ insurance reform in lowering rates is further proof that Illinois’ caps on compensation was a misguided solution. “These developments undermine one of the central claims by special interest groups who sought to blame the legal system for doctors’ insurance woes and pushed for caps,” said Mark Fraley, CJ&D-IL’s Acting Director.  “Consumer groups have said all along that the causes of and solutions to doctors’ insurance problems lie not with the legal system but with reforming regulation of the insurance industry.  The fact that Illlinois’s legal system was severely weakened as a result of false and misleading information from the insurance industry is a travesty, which now should be corrected by repealing these cruel damage caps.”
Illinois malpractice law, passed little over a year ago, limits compensation for people who have been injured or lost family members as a result of medical malpractice.  Another provision of the law requires insurance companies to disclose how they set their rates and calls for greater oversight over their ratemaking structure. It was these insurance reforms, not the caps on compensation, that led to the Med Pro’s decision, state officials said.
The day after the medical malpractice law was signed, the Division of Insurance called in ISMIE, Illinois’ largest insurer, for a hearing, calling its rate increases on certain physicians “problematic.”  After a series of meetings, the DOI ordered ISMIE to lower their rates by 3.5%.
For more information: http://centerjd.org