We constantly hear about a medical malpractice insurance crisis in this country. The insurance companies consistently complain about not making enough money. They have to raise doctors premiums because the system is out of control. Doctors get upset because their premiums keep going up and they blame lawyers. What a mess!
Well, as it turns out, my theory has been right: insurance companies are not being fully honest in this debate. The nonpartisan Foundation for Taxpayer and Consumer Rights has just released a study that shows that medical malpractice carriers are overestimating their losses. And guess what? In bad economic times, they increase this practice.
Why do they do that? In bad economic times, insurance companies are not making as much money from investments. So, in order to increase profits, they have to increase premiums. But, in most states, they cannot increase premiums without approval. That approval only comes if they can show increased losses. So, they increase their losses to get a rate increase so that they can make more money.
I do not think I am asking for much, but how about a little honesty from the insurance companies?