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Lower Insurance Premiums for Medical Malpractice Bill Introduced

January 25, 2005
NBy: Nicole Volhontseff
State Capital Bureau

JEFFERSON CITY - Democratic senators introduced a bill to aid doctors facing " soaring medical malpractice insurance rates."

"The bill would lower malpractice insurance premium rates. It would put some regulations on the insurance industry that would result in lower rates," said Sen. Joan Bray, D-St. Louis County.

Sponsored by Sen. Bray, the bill combines legal reforms with insurance regulation to protect doctors from increasing medical malpractice rates. The act exempts malpractice insurance from rate regulations that apply to other forms of property and casualty insurance. The rates are not to be excessive, inadequate or unfairly discriminatory.

The act creates a tax credit for health care providers to compensate the insurance premiums. The tax credit is an amount of up to fifteen percent of an annual increase in the provider's medical malpractice insurance premium and is capped at $15 million.

Under the act, a ratio between the base rates of the highest and lowest-rated specialties would be created. A ratio of six-to-one provides flexibility between physicians working in high-risk areas and those who are not with their insurance says Sen. Bray.

Long-term relief will be brought to physicians by allocating authority to regulate premium rate increases to the Department of Insurance. Malpractice insurers would also be required to provide data regarding their investment performance, premiums and losses and rate changes over the past five-year period.

In addition, any insurer wanting to increase the rate beyond fifteen percent has the burden of proving that the requested rate increase should be implemented.

A large opposition to the bill by insurance companies is expected.

"They want to make money in the end," said Sen. Maida Coleman, D-St. Louis City. " They want to see that bottom line show that their corporations are doing very good. That's great for the stockholders, but there are a lot of us out here who happen to be stockholders who are hurting."