The Insurance Lobby's Hold on the Texas Legislature

A guest editorial in the Austin American-Statesman newspaper, July 27, 2005, by Alex Winslow
 
Recent reports by the Austin American-Statesman have confirmed a long-held suspicion: insurance companies financed the political operation of a prominent business lobbying group in 2002.

This group, the Texas Association of Business (TAB), is the target of an ongoing criminal investigation and is the defendant in numerous civil lawsuits arising from the group's political activities.

When all of this took place, Texas homeowners were experiencing skyrocketing insurance premiums, and doctors were balking at high medical liability premiums. Insurance industry lobbyists were pointing fingers without taking any responsibility for the artificially high premiums.

Homeowners were clamoring for rate relief, and doctors were threatening to leave the state. Everyone was looking to the Texas Legislature for help. During the 2002 election campaign, it didn't matter where you were from or which party you belonged to; politicians were promising relief for homeowners and doctors.

Thanks to the Statesman's excellent reporting, we now know that in the midst of this insurance crisis, the insurance companies were bankrolling TAB's political operation by dumping hundreds of thousands of dollars in illegal corporate cash into the organization's coffers.

When they got to Austin, lawmakers found themselves in a quandary. Homeowners and doctors needed help, but the insurance companies who funded the drive that got them elected wanted to keep state regulations weak.

So the Legislature passed a half-baked insurance "reform" bill that years later still hasn't resulted in any meaningful rate relief for homeowners or drivers. We still pay exorbitant premiums that are more than twice the national average. In fact, Texans paid nearly $4 billion in insurance overcharges last year alone — an average of $600 per home and $200 per car. And State Farm, the state's largest homeowners insurer and one of TAB's biggest donors in 2002, has refused to lower its rates one penny.

As for the high medical liability premiums doctors were forced to pay, insurers used Texas doctors to push a proposal to strip Texans of their legal rights. Instead of cracking down on the very small number of doctors who commit the majority of medical errors and then forcing insurers to lower their rates accordingly, lawmakers chose the insurance industry's path. They enacted sweeping legal changes that shielded the insurance companies from responsibility, leaving untold numbers of Texans without any ability to hold an irresponsible doctor or hospital accountable for devastating, life-altering injuries.

The insurance companies' investment in an illegal campaign racket during the 2002 campaign has paid off handsomely. Now, three years later, they continue to reap huge dividends from that investment at the expense of policy-holders, who continue to pay too much, and patients, who are left with no real recourse against wrongdoers.

Lawmakers are now debating a tax bill that is being sold as tax relief for homeowners but really is a giveaway to the insurance industry and other special interests. One look at official projections reveals that the insurance companies will receive the largest break under the bill, while Texas families earning less than $100,000 a year will actually see their taxes go up. Clearly, the payoff continues.

The insurance companies and their special interest lobbyists have fought for years to keep the game they played in 2002 secret. They can't hide anymore, and neither can the lawmakers who have benefited from their largesse.

Now that we know the truth, isn't it time for our lawmakers to enact real, common-sense insurance and legal reforms? By strengthening patient safety measures, improving the quality of health care and access to it, restoring our legal right to hold a wrongdoer accountable and lowering insurance premiums for homeowners, our lawmakers can go a long way toward restoring the public's trust.

Winslow is executive director of Texas Watch, a consumer advocacy organization based in Austin.