GREENLEAF MED/MAL INSURANCE PLAN TARGETS SAVINGS AND SUPPLY
HARRISBURG – In an effort to increase the supply of medical malpractice insurance and reduce rates for health care providers, Sen. Stewart J. Greenleaf is proposing legislation to stop frivolous lawsuits, provide for an experience rating program under standards set by the State Department of Insurance, and engage the state’s property and casualty insurers in a plan to expand the medical malpractice insurance market.
Greenleaf noted that his proposals have similarities to statutes enacted in the past to address problems in the automobile insurance market. "One bill is similar to Act 6 of 1990, which limits vehicle crash lawsuits to cases involving death, serious impairment of bodily function, or permanent serious disfigurement. My legislation would apply the same standard to medical malpractice lawsuits in the commonwealth with the goal of reducing the number of frivolous suits filed against doctors," Greenleaf said.
Another bill proposed by Greenleaf is modeled loosely upon the auto insurance assigned risk program. His proposed Physicians’ Safety Net Insurance Program (P-SNIP) would require all insurance companies writing property and casualty insurance in the state to write a proportional amount of medical malpractice insurance for those physicians who cannot obtain coverage in the regular insurance market, thus spreading the risk and increasing availability. Just as with the auto insurance assigned risk pool, there would be separate rates for "clean" risk physicians and for those physicians designated as "high" risk based on their medical malpractice history.
The senator said that he is counting on his plan reducing costs in the medical malpractice market by increasing the supply of insurers. According to 2001 State Insurance Department figures, there are approximately 900 companies writing property and casualty insurance in Pennsylvania. They collected $14.8 billion in premiums from all lines. Of that amount, $371 million was collected in medical malpractice premiums. That means medical malpractice accounts for just 2.5 percent of the property and casualty market in the commonwealth. Approximately 80 insurers write medical malpractice insurance now in Pennsylvania, but obtaining coverage is still a problem. "I don’t think it is too much to ask all property and casualty insurers doing business in the state to pick up a small number of medical malpractice clients based on the amount of other lines of insurance they write here," Greenleaf said.
The senator said the new system would eliminate the future need for the Joint Underwriting Association (JUA) program that currently serves as a residual market for health care providers who cannot find medical malpractice insurance. Physicians have complained that JUA rates are unreasonably high, even in the case of doctors without a history of medical malpractice claims.
A third Greenleaf bill is aimed at premium savings and ratings fairness for health care providers. It would require the State Insurance Department to establish standards that medical malpractice insurers would follow in developing a rating system based on the experience of health care providers so that physicians without a history of lawsuits will pay lower premiums. The rating system would determine the coverage level of individual doctors. Currently, all Pennsylvania doctors are required to carry one million dollars in medical malpractice coverage, but Greenleaf’s proposal would set the mandatory minimum coverage level at $250,000—a rate that would be available to doctors who have no experience with serious and valid malpractice claims. "Too many doctors are paying too much money for coverage under the current system. If a doctor is free of serious and valid claims, then that doctor should not be forced to pay exorbitant premiums for excessive coverage," Greenleaf said. "The State Insurance Department, under my bill, will develop fair and reasonable standards for rating doctors to determine their coverage level, and insurers will follow those guidelines to provide doctors with a fair rate."
Greenleaf said he is offering an alternative method for reducing premiums by reintroducing legislation that would eliminate entirely the mandatory medical malpractice coverage requirement for doctors to practice medicine in the state, thus allowing individual practitioners to determine for themselves the level of insurance coverage they want to buy.
As a feature of both the experience rating proposal and the bill giving doctors discretion to choose their level of coverage, patients would be made aware of the level of coverage maintained by health care providers when they sign a procedure consent form. The legislation would require that the amount of coverage be printed on the consent form.
"Last session, the General Assembly passed a number of reforms requested by the medical community to bring down the cost of medical malpractice insurance and increase its availability, but the market hasn’t really budged. My plan would guarantee that more companies will be writing medical malpractice insurance and this, in turn, will reduce costs. Also, by blocking frivolous lawsuits and by utilizing experience rating standards in determining rates, the legislation will facilitate further savings for health care providers who are being squeezed between the rock of dwindling insurance supply and the hard place of sky-high rates," Greenleaf said.
