The FTCR (Foundation for Taxpayer and Consumer Rights), a consumer advocacy group, has found that, from 1986 to 1994, medical-malpractice insurers reported expected losses of $40 Billion while only paying out $27 Billion in claims.
According to FTCR founder, Harvey Rosenfield:
“By inflating their estimated ‘losses’ as much as 66 percent, medical-malpractice insurance companies have misled regulators, lawmakers and the public and overcharged physicians and other healthcare providers.
“Because all insurance companies use the same flawed accounting practices, it is likely that the insurance industry is responsible for several billion dollars in premium overcharges over the last few years, a period during which premiums have soared.”
While data from after 1994 is unavailable, the findings closely match a study conducted by former Missouri Attorney General Jay Angoff. That study, released last summer by the Center for Justice and Democracy, found that insurance companies are taking in twice as much as they were in 2000 while paying claims at or just above that year’s levels.
The New Standard has more on this medical malpractice study.