Each Chicago nursing home lawyer at our firm is actively involved in the fight to prevent unnecessary “tort reform” measures. As we have discussed, a few federal proposals to limit the legal rights of injury victims have been offered that would affect the ability to demand accountability of negligent nursing homes. These proposals are universally misguided, unnecessary, and dangerous. Unfortunately they represent a sophisticated power grab involving large, wealthy corporations who are seeking to limit the rights of regular community members from demanding that the companies actually pay for the consequences of their mistakes.
As a comprehensive new report from the Center for Justice and Democracy explains, one of the ways that these companies “sell” tort reform to the masses is with the misguided claim that the justice system is responsible for an increase in insurance costs. The report, entitled “Repeat Offender: How The Insurance Industry Manufactures Crises and Harms America,” reveals that insurance companies may be colluding to send business premiums skyrocketing in the new year. The report authors argue that the hikes will be sold by the companies as necessary because of a fake “crisis.” Yet this so-called crisis does not actually exist.
Instead, the crisis will be manufactured in order to turn the “soft” insurance market into a “hard” one. Soft markets are those that benefit consumers, where premiums are low and insurers fight to attract to customers. However, if these companies work together they can shift it to a “hard” market where premiums rise while coverage falls. The report explains how the claimed need to make these changes is accomplished by simply manipulating the numbers. For example, the claimed insurance company losses include a category of losses that have not even occurred yet but are claimed to be “expected.”
In reality the insurance industry is going just fine. Last year, Best’s Aggregate and Averages explained that the insurance industry had cash surpluses of $580 billion. That huge sum does not even include the money that the companies set aside to cover the estimated costs of future claims. Those reserves are only set to increase as insurance companies may raise rates on business (and some personal customers) as much as 100 to 200 percent.
Most industries are not allowed to collude in this way to force increases. However, insurance companies are exempt from antitrust provisions which have applied to other industries since the McCarran-Ferguson Act of 1944. As a result of their exemption, insurance companies are allowed to “pressure their own competitors to stop competing for premium dollars and to raise rates and reserves as an entire industry.”
Time and again nursing home abuse has been curbed because average community members stood up and used the justice system to make negligence facilities enact changes to keep residents safe. Yet, our Chicago nursing home neglect lawyers know that the ability to do so may be severely curtailed if certain tort reform measures become law. We urge all advocates of decent senior care to read up on this latest insurance industry maneuver to make even more money at the expense of nursing home neglect victims.
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