PRIOR APPROVAL: Front-line defense against rising rates, fraud by insurers

It shouldn’t take a brain surgeon to figure out that insurance companies are the reason doctors’ insurance rates have skyrocketed. Yet, doctor and hospital lobbying groups in Georgia have ignored the data about rising insurance rates and rising insurance industry profits.

Even worse, when insurance companies made empty promises to lower premiums if Georgia lawmakers passed “tort reforms,” doctors jumped on board too.

Too bad they didn’t look at the facts about California: The first state to pass “tort reform” in 1975.

Consider these numbers compiled by California’s Foundation for Taxpayer and Consumer Rights:

* 450%: Percentage that California doctors’ premiums rose in the 13 years after that state enacted a $250,000 cap on damages.
* 20%: Percentage that California’s doctors’ premiums declined in the three years after that state enacted Proposition 103 – a sweeping reform package that forces insurers to justify their rate increases under the scrutiny of consumers and the Insurance Commissioner.
* $1.2 Billion: Amount that insurers have refunded to doctors and other consumers since California voters enacted Proposition 103 in 1988.
* $891,000: Amount that the $250,000 cap in 1975 would be worth today.

And doctors are only one of many consumer groups that have benefited from California’s model oversight of insurance companies.

* 25%: Percentage that California drivers saw their auto insurance premiums DECREASE between 1989 and 2000.
* 26%: Percentage that drivers in the rest of the country saw their auto insurance INCREASE during the same period.

The success of strong oversight of insurance companies preying on “captive markets” such as doctors and drivers is not limited to California.

In the State of Washington, doctors lobbied for years for barriers to justice for victims of medical negligence, including a “cap” on jury awards for injured patients and their families.

But “the state’s doctors may have found a legitimate way to cut medical malpractice premiums: Get their malpractice insurance company to quit gouging them,” writes Seattle Post Intelligencer columnist Thomas Shapely.

In March 2005, Washington’s Insurance Commissioner announced that Physicians Insurance would have to refund more than $1.3 million plus interest in excess premiums charged in 2003. The company chalked up the overcharges to a “paperwork error.”