Archive for Thursday, April 22, 2004

Insurance myth

April 22, 2004

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To the editor:

A recent ad in Kansas newspapers has raised the visibility of a horrible bill working its way through the Kansas Legislature, SB 430. Ostensibly, the purpose of the bill is to lower escalating liability insurance costs for nursing homes. In reality it will limit the evidence that residents can present in medical malpractice cases.

Proponents of this bill are trying to perpetuate the myth that malpractice insurance rates keep rising because of increasing claims and higher payouts. A recent study by the National Center for State Courts reports the number of malpractice cases filed over the last ten years has remained steady and, earlier this month, the Wall Street Journal reported, "Jury awards for medical-malpractice cases have remained level in the latest three years for which data are available." As for insurance company profits, the March 22, 2004, edition of Business Insurance reported profits for major property and casualty insures in 2003 had risen 89 percent from 2002.

The fact is, the insurance industry makes its profit from investment income. When interest rates and insurance profits are high, companies compete fiercely to maximize premium dollars to invest. Often this leads to underpricing of policies and the insuring of high-risk customers. Conversely, when interest rates or the stock market drop and/or price cuts make profits too low, premiums increase as coverage drops.

SB 430 won't lower insurance rates; it will harm Kansas' nursing home residents by limiting the evidence they can use to protect themselves from abuse and neglect in these institutions.

Kevin Siek,

Topeka

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