Sometimes it is impossible to understand how certain cases get before a court. The truth is our administration would love to pass the rising costs of goods, insurance and healthcare on to free market companies. However, we must first understand all applicable costs in order to understand related lawsuits.

All goods have a fixed cost.  While supply and demand plays a major role in the cost of a product, there are a few other costs we don’t even recognize as such; insurance is one.  Not only do we pay taxes on the goods and services we purchase, we also pay to cover the insurance costs of the owner or service provider. Every business owner is obliged to carry insurance. Every year it seems like the cost of insurance increases.  Our government loves to blame the insurance companies for making “greedy profits,” but where are these profits?  Take a second to view the profitability by industry as listed in the Fortune 500.  Does the Administration mean the “greedy” profits of the 13th ranked Healthcare Insurance Industry? Or maybe they mean the profits that stood far behind the Food and Beverage Industry ranked 9th in the fortune 500. As the lies continue, let’s take a look at the hard facts. 

Why are Insurance companies getting such a terrible reputation?  Are the insurance companies any different from the local convenience store, or the Wal-Mart down the street?   As a free market company, are they not allowed to make a profit? We choose to pay our free market insurance for a reason.  We are not forced to, yet we do.  Why?  There is a simple reason: because we WANT to be INSURED.  We want to be responsible and we want to be protected.

We are all unhappy paying premiums until that one day when all the premiums we have paid go toward one accident, or that one severe illness, and then some. Yet, the cost of premiums is on the raise, mainly due to payments made by insurance companies in frivolous lawsuits. What would happen if the frequency of these lawsuits decreased? Would the money saved by the insurance companies enable them to lower premiums?  The answer is YES. 

There will always be those who say, “No, the insurance companies will just keep these profits for themselves.”  Will they?  In a free market economy this fallacy could not possibly happen.  Insurance companies are in constant competition with each other.  Every year, companies around the nation are shopping their Insurance to find the best coverage for the lowest cost.  If we are made to think that Insurance Company A who had gained profits from lower expense costs (litigation) would not lower their premium’s to gain market share then we are giving in to the lies this Administration has been telling us for close to a year.  If Company A lowers premiums Company B will be forced to lower their premiums to keep their client share.  This is simple economics which our Administration believes we don’t understand. 

The way to fix this industry is not through a single government-run insurance provider. Rather, the government should focus on tort reform to eliminate the presence of frivolous lawsuits and loosen regulations across state lines. The competition is there, let it work naturally.  Open the state line restrictions and let all the companies compete with each other state wide.  The President was right in his original campaign.  We do need Health Care reform but we want the reform he originally won his election with. TORT reform!  
However, the administration has taken away this idea, which we the people have voted for, and are trying to pass a new bill which has no intention of addressing this issue.  How many more lies can we take from our politicians before we must take action?  How much longer can we stand silent, when we have two parties, government and lawyers, comingling together to benefit no one but themselves? Do not let these “lawsuit happy” attorneys drive up the costs of our insurance any more.

The number of lawsuits filed increases every year.  It is no wonder why law schools are packed with students.  Lawsuits cost the economy over $200 billion a year!  Meanwhile, we are paying a “lawsuit tax” which averages about $700 a year.  To add insult to injury, we all know where this money is coming from: yes that’s right, the insurance companies’ “deep pockets.” And who ultimately ends up paying for this? Every insurance paying citizen in the U.S. does!

Who benefits from these lawsuits?

We would all love to believe that the sole beneficiaries settlements is the plaintiff, however we all know this is not true.  The lawyers and the government work hand and hand on this one. Not only do plaintiff lawyers make a very large profit on the unrealistic punitive damages of these cases, but so does Uncle Sam.   All of which is taxed, so the government actually makes a profit on these settlements.  According to the IRS tax laws, “Punitive damages are not excludable from gross incomeunder IRC section 104(a).”
 Have you ever wondered why there is an advertisement on every television station for lawyers seeking new civil suits?  Money!  No matter how frivolous the case may be, there will be an attorney ready to file suit.  These suits drive up defense costs and ultimately drive up the cost of insurance which you and I pay for.  Did the person who slipped while going to the grocery store in the middle of a snow storm deserve to sue the contractor for a $300,000 settlement when all they had was a bruised ego?  How about that famous 79 year old woman who sued McDonald’s for spilling coffee on herself? One has to wonder how these types of cases are even brought up in court, and who is defending these clients and winning these settlements.

 I know we are asking ourselves, “How can we fight the same people who are making these laws?”  Well we can.  Just as our country’s founders dumped the tea into the harbor to refuse tariffs of a government which we as Americans believed were too controlling over our basic freedom, SO CAN WE NOW!  Numbers speak to our legislator and this will take time and hard work.  RAAFTA was formed for this reason. We believe that “hard work” will pay off and will bring truth back to our great nation!