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Huffington Post Reports Medical Malpractice Insurers Have License to Gouge

10/23/2009
Source: 
Huffington Post

The Huffington Post has recently posted an article titled: Medical Malpractice Insurers: “Time to End Their License to Gouge.” This insightful article discusses the repeal of the McCarran-Ferguson Act, a law which has been in place for nearly 60 years.  The McCarran-Ferguson Act allows the insurance industry to fix prices, collude and practice anti-competitive behavior. Significantly, the same practices bestowed on insurance companies in the McCarran-Ferguson Act are illegal in every other industry.

As the author points out, repeal of this act is significant in that it will make insurance rates more competitive. In fact, The Consumer Federation of America has predicted that repealing this law for medical malpractice insurers could result in a 20 percent insurance savings for doctors.
For years, doctors have been screaming about their medical malpractice insurance rates. The medical malpractice insurers always blame the legal system and trial lawyers. They tell lawmakers that the only way to bring rates under control is to strip away patients’ rights to go to court. However, repeal of the McCarran-Ferguson Act will prove them wrong.
In fact, after Texas passed a law placing caps on recoveries of medical malpractice victims and severely limiting their rights to go to court, the medical malpractice insurers there still sought a rate increase. When pressed about the effect of the recently passed tort reform, the biggest medical malpractice insurer responded that malpractice verdicts accounted for less than 1% of the payouts made by insurers.
Why is the insurance industry the only industry in America that is allowed to price fix and practice anti-competitive behavior? This country needs insurance reform, not tort reform. As the author correctly points out it is unfair and ineffective “to try to reform insurance abuses on the backs of malpractice victims.”