What, the insurance companies lied?

A report by the American Association for Justice (AAJ) indicated that "while we hear that the high cost of insurance premiums were driving doctors out of practice, the reality is that, medical malpractice insurance providers are increasing their profits better than any other Fortune 500 companies.

Here in Texas, the misconception that "frivolous" law suit were the reason for the increase on medical malpractice premiums is finally revealed. Proposition number 12, as we know it was all false propaganda by the insurance industry to increase their bottom line, to the detriment of the injured victims. Conversely, insurance companies have perfected their scheme to a science.

Insurance companies are required to keep "reserves" to pay for anticipated claims. The report has discovered that "often insurance companies grossly overestimate the value of pending claims, only to be able to adjust their books years later after the claim are finally resolved. The ability to hide these earnings allows insurance companies to argue that their profits are lower, thus creating the false need to increase insurance premiums to doctors, while lobbying for tort reform to minimize the payment on the aforementioned claims.

In other words, insurance companies through Enron-esque accounting maneuvers, are not telling the public, their insurers or congress the whole truth. While their profits escalate, they continue to lobby for more tort reform. In Texas, there is already a cap on non-economic damages which creates this abyss for the injured victims from which they cannot recover.

The report further comments that “as these hidden profits were exposed, it became clear that the so-called medical malpractice crisis (prop 12 here in Texas) was nothing more than a coordinated scam by insurance companies that included hiding profits while simultaneously raising premiums on physicians, and then blaming injured patients and their attorneys for these high premiums.” A full proof plan, or so they thought.

We believe that Texas needs to implement insurance reform, not tort reform, and now we have the documentation to prove it. Let us stand together and fight these injustices.