Crackdown Is Not Reform
High-profile insurance fraud arrests, like those carried out this week in Orange and San Diego counties, do indeed dramatically underline the need to reform the state’s enduring insurance mess. Would that an overhaul of the entire flawed system could be carried out with the same precision and dispatch. But don’t count on it.
The state’s failures in recent years at effecting comprehensive reform prove that easing political gridlock on insurance reform is not the same thing as rounding up the usual suspects.
This week’s arrests brought in people allegedly connected with fraud rings that cheated insurance companies out of millions of dollars. A number of doctors, attorneys, scam recruiters and clients, as well as employees of law firms and medical clinics, were arrested.
In announcing the busts, state Insurance Commissioner John Garamendi focused attention on white-collar culprits--lawyers, doctors and other medical professionals--who he said were costing the auto insurance industry billions annually. The investigation involved infiltrations in which law enforcement officers impersonated “cappers”--individuals paid to recruit people willing to become part of phony accident schemes involving doctors and lawyers.
But although successfully cracking down on insurance fraud makes for dramatic news conferences, it is only one piece of a much more complicated puzzle. Arriving at a methodological consensus on how to bust the cheats in a dramatic way sends the right signal. The harder part is enlisting the state’s key players--the trial lawyers who have opposed no-fault coverage and the stubborn insurance companies that want change on their own terms--in the cause of true insurance reform. They are the ones with the highest stakes in the costly insurance game.
Yes, the efforts at rooting out fraud are laudable. And they suggest that, in the cause of reform, where there is a will there is a way. Now on to some other needed changes: low-cost, no-frills liability coverage, no-fault insurance and an end to the political logjam.