Medical malpractice insurance rates have fallen in many states in recent years because of tort reform laws, and the American Academy of Actuaries is worried that federal healthcare reform legislation could reverse that trend by hindering information-sharing among insurers.
Kevin Bingham, chairman of the academy’s medical professional liability subcommittee, sent a Jan. 21 letter to the Democratic and Republican leaders of the U.S. Senate and House
urging the lawmakers to restore legislative language that encourages data-sharing.
Without such language, fewer insurers are likely to provide their market information, which could lead to fewer insurers willing to write medical malpractice policies, thereby potentially causing rates to rise because of a lack of competition, Bingham wrote. But a rate increase for medical malpractice insurance would contradict the cost-saving intent of healthcare reform legislation.
Unlike many types of insurance, medical malpractice is extremely difficult to set rates for because malpractice claims tend to be infrequent but very large. Without marketplace information, many smaller and newer insurers, as well as self-insurers, would be less likely to write malpractice policies because of a risk of insolvency, Bingham said.
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