Democrat From Kentucky


Democrat from Kentucky
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Today In Kentucky Friday, December 30, 2005

I'm glad Mark over at the Bluegrass Report keeps up with lots of things. He had a number of great things today:

One thing that really caught my attention was the Washington Post story discussing malpractice insurance companies lying to state regulators about they're losses due to malpractice suits.

The insurance industry has long argued that huge losses from malpractice suits -- now running more than $7 billion a year -- have forced it to hike malpractice premiums, which more than doubled last year in some cities and for some specialties.

But a new study by a consumer group shows that losses reported to state regulators -- the figures often cited by the industry -- were much larger than losses actually paid during a nine-year period.

The study, by the Foundation for Taxpayer and Consumer Rights, a Santa Monica, Calif., advocacy group, found that from 1986 to 1994 the industry reported to regulators losses of $39.6 billion but actually paid only $26.7 billion, 31 percent less. The losses were overstated in each of the nine years.

[...]

What insurers initially report to regulators as "losses" actually are only estimates of what claims will cost once they are settled. Insurers don't pay every claim or loss they report, since some turn out to have no merit and others are more or less expensive than first believed. That is particularly true for claims involving litigation, which can take a long time and be hard to predict. But insurers use those estimates to help set premiums for the coming year. So prices can go up, even if the losses eventually turn out to be smaller.


So what have we learned here boys and girls? We've learned that the insurance companies are LYING and they're making buddy buddy with people like Senate President David Williams who, every year, introduces SB1. This is is medical malpractice bill.

Last winter when I covered the state legislature, I had a chance to observe the senate. While the Republicans kept yelling the Dems were being bought off by the trial attorneys, the Dems failed to go after the Republicans for the teaming with the big insurance companies for bank rolling this mess.

I have no problem with insurance companies basing their rates on the market but don't lie to us about saying it's from lawsuits. There is absolutely no correlation between the malpractice insurance rates and the malpractice suits. Seems strange ... but it's true.


posted by Stithmeister @ 12:06 AM
 
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Location: Harrodsburg, Kentucky, United States

I'm currently working in the telecomm industry but one of my passions is still politics.



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