Actuaries Say Don't Move Health Care Bill Changing Antitrust Rule

NU Online News Service, Jan. 25, 3:29 p.m. EST

With health care reform legislation now stalled in Congress, actuaries asked lawmakers not to push forward with the measure if it removes the antitrust exemption for medical malpractice insurers.

The American Academy of Actuaries said the legislative efforts to strip away the antitrust exemption for medical professional liability insurers "could preclude data collection and aggregation across companies, limiting competition, and potentially increasing premiums."

In a statement, the actuaries said they "urged policymakers to discontinue efforts to advance the repeal provision."

Kevin Bingham, chairperson of the American Academy of Actuaries Medical Professional Liability Subcommittee, in a letter Thursday to congressional leaders said, "The result of the enactment of H.R. 3962, relative to medical professional liability insurance, is likely to be reduced availability with fewer willing insurers, less vigorous competition among those that do write coverage and higher costs to the consumer."

Mr. Bingham said if policymakers intend to move forward with the repeal, they should restore language from an earlier version of the bill that would permit information-gathering and rate-setting activities, which are currently allowed under the McCarran-Ferguson Act that contains the antitrust exemption.

He said aggregated data provides credible information to market participants; enhances and supports competition; and guides companies, self-insurers and regulators in reducing the likelihood of insolvencies.

A single company's data, said Mr. Bingham, is often not sufficiently credible to determine basic loss costs and reasonable premiums. He attributed this to the "low-frequency, high-severity, long-tailed" nature of medical professional liability claims, which makes the estimation of losses and premiums more uncertain than in other insurance lines.

The letter is available at: http://www.actuary.org/pdf/casualty/medmal_hr3962.pdf.