Medical Malpractice Insurance Companies May Be Forced to Drop Premiums for Medical Professionals August 1, 2012.
This story is potentially good news for doctors but bad news for insurance companies.
The state of California is in an interesting battle of wills, with a ballot up for consideration that, if passed, would mean patients get the identical level of protection against health insurance premiums considered unfair as doctors get through their practice. In plain English, the rate regulation being proposed would drop the current insurance rates by $21 million. This is great news for patients but not so good news for insurance companies who make good money on overcharging medical health professionals for malpractice insurance.
The likely upshot? Even though the insurance companies may be forced to reduce rates, you can be sure they will find a creative way to hike rates some other way. The way this is supposed to work is that the state’s Department of Insurance will use a prior approval rate regulation authority to drop premiums for medical negligence insurance for a group of 20,000 medical health professionals.
It is not just this latest group to get lower rates; as six other medical malpractice insurers had also been told, in no uncertain terms, to cut their premiums by $44 million. The state appears to be deadly serious about putting the brakes on overcharging, a refreshing change to say the least, as it is illegal in California for insurance companies to charge excessive or unfair premiums for medical malpractice. Next on the proposed ballot? Seeking protection for premiums paid out by patients for their health insurance.
The vote on this issue is not until November, and many are viewing it with eager anticipation. Who wouldn’t want to pay less for their health insurance, more so now given the fact the Supreme Court just handed down an endorsement of Obama’s health care reform mandating Americans have health insurance by 2014. If the ballot passes, it would potentially affect 5.5 million people. If this were to be implemented in other states, insurance companies would receive the comeuppance that many feel is their due. Americans are tired of being gouged on health insurance premiums.
Not surprisingly, insurance companies are not happy about this potential turn of the screw. Most insurance outfits loathe to publicly justify or prove their need to hike rates before they go into effect. It is only fair that patients get the same kind of protection.