Legislation intended to establish "a safety net for Ohio health care providers and their patients" by authorizing a state-created medical malpractice insurance company in the event private insurers fail cleared a House panel Tuesday, December 16, without opposition. The House Insurance Committee, acting at the request of ODI Director Ann Womer Benjamin, recommend a measure on which the full House is expected to vote in January.
If enacted, the bill (HB 282 http://www.gongwer-oh.com/index.html?link=legislation_billdetail.cfm&code=HB%20282&billid=2003HB28202&locid=2 ) would authorize the director to establish a Medical Liability Underwriting Association if liability coverage becomes unavailable in the state. The legislation would capture $12 million from a now-defunct 1975 Joint Underwriting Association (MLUA) to help finance the new company or for other initiatives related to medical malpractice insurance problems.
Director Womer Benjamin said three of the five major medical malpractice insurers in Ohio have had some financial problems in the last six months, and two in the last month alone. She is concerned that aside from the question of affordability-the topic that has driven debate for more than a year-availability of policies also could become an issue.
Language authorizing the MLUA was incorporated into a substitute version of a bill sponsored by Rep. Larry Flowers (R-Canal Winchester) that otherwise would deal with liquidation of insolvent insurance companies.
Director Womer Benjamin said that under the substitute, the insurance industry would not be liable for assessments or contributions and, as a result, the company would not be a joint underwriting association but a medical liability underwriting association financed with "actuarially sound" premiums from physicians and hospitals that buy coverage. Applicants must meet underwriting criteria.
The substitute would create a stabilization reserve fund in the event premiums were insufficient to generate the revenue needed to operate. Money for the fund would come from additional assessments on the doctors and hospitals that held MLUA policies. A stabilization fund for the 1975 underwriting association had a provision to levy a stabilization assessment on all physicians. "The potential assesses in this stabilization fund are limited to those who are policyholders," the director said.
In the event a reassessment did not generate enough money, Ms. Womer Benjamin said options theoretically could include asking the General Assembly to extend the fee to other individuals, or liquidating the company. "There is nothing in the legislation that would make the state liable, and that is consistent with similar funds. The prior JUA was the same way," she said. "If it is run the way it should be run, the premiums charged should be sufficient."
The committee accepted the substitute bill without opposition. Approved on a 15-1 vote was an amendment specifying that the General Assembly could use the $12 million for related medical malpractice purposes in addition to the proposed underwriting company, such as recommendations from the study commission.
The AMC/NOMA lobbyist was involved in the meeting/discussions and provided AMC/NOMA comments on the proposed amendments. AMC/NOMA also sent a letter to the committee when the amendments were reviewed