State deserves credit for ISMIE's changes
I write in response to your story announcing that the ISMIE Mutual Insurance Co., the state’s largest medical malpractice insurance company, is lifting its moratorium on accepting new clients. The story correctly pointed to a better economic and legal climate as reason for the expansion, but left out a crucial reason for the improved climate: Gov. Rod Blagojevich demanded that medical malpractice reform include provisions that would open Illinois’ medical malpractice market to much-needed competition.
Until recently, one malpractice insurance company (ISMIE) collected nearly 70 percent of all premiums from Illinois’ doctors. When a single company controls such a substantial portion of the market for malpractice insurance, the hard-working doctors of the state are deprived of choice when it comes to their insurance needs.
Thankfully, the Medical Malpractice Reform Act, which was negotiated by the Blagojevich administration and passed by the Illinois General Assembly in 2005, requires medical malpractice insurers to open their books and disclose the data used to determine risks and set rates. The public disclosure of this information has increased competition in Illinois and allowed at least four companies to enter the market or expand their market share in our state. In some cases, premiums for doctors have been reduced by more than 30 percent.
These are results that help doctors and benefit patients because now doctors can afford to focus on providing care.
While ISMIE’s moratorium was originally self-imposed, your readers should know that an order signed by the director of the Division of Insurance, Illinois Department of Financial and Professional Regulation, prohibited ISMIE from lifting its moratorium until December 2006. This prohibition allowed other insurers to establish new rate structures and offer more options to Illinois’ doctors.
That same order required ISMIE to return excess premiums to its policyholders as dividends. ISMIE’s announcement that dividends will be paid to policyholders indicates that the reforms — and the order — are working as intended.
As he continues to expand health care to all Illinoisans, Gov. Blagojevich should receive credit for insisting on market reforms — not tort reforms. Although physicians and surgeons still pay a high price for liability insurance, his priorities will make the market for medical malpractice insurance more competitive, more stable, and ultimately result in more health care dollars paying for health care for Illinois families.
Dean Martinez is secretary of the Illinois Department of Financial and Professional Regulation.