Rep. Nelson Issues Statement at Hearing on Insurance Fraud in America

WASHINGTON, Aug. 3 -- The Senate Commerce, Science and Transportation subcommittee on Consumer Protection, Product Safety, Insurance and Data Security issued the following statement by Commerce Ranking Member Bill Nelson, D-Fla., at a hearing entitled "Insurance Fraud in America: Current Issues Facing Industry and Consumers":

"Thank you for calling this hearing Mr. Chairman. As Florida's former insurance commissioner, I've seen firsthand how fraud impacts consumers and insurers.

"Insurance fraud takes on many forms from sales abuses that target the elderly to "cash for crash" schemes where accidents are deliberately staged or caused for financial gain.

"One of the most despicable cases I can recall was that of an insurer who took advantage of black policyholders for decades by overcharging them for burial policies.

"Fortunately, we were able to put a stop to that practice.

"While individual states, and not the federal government, continue to be the primary regulators of insurance, I welcome hearing from our distinguished panel today regarding the trends they're seeing on the fraud front and whether there is a role the federal government can play to help the states.

"Meantime, since we are talking about insurance, I would also like to take this opportunity to share my thoughts on last week's health care vote and its aftermath.

"As I have said throughout this process, we need to come together and seek bipartisan solutions to fix the Affordable Care Act and not undo all of the good things its done.

"That is why I've been working with Senator Collins to find solutions that will provide immediate relief to families back home.

"In fact, over the last week the two of us have joined a bipartisan group of other senators who share our desire to find a path forward.

"We've discussed creating a permanent reinsurance fund to lower the financial risk of insurance companies and reduce premiums for American families.

"I've seen this work before during my days as insurance commissioner following Hurricane Andrew, the second costliest hurricane in our nation's history.

"In Andrew's aftermath, Florida established a reinsurance fund to insure the insurance companies for their catastrophic losses.

"The same thing can and should be done for health care.

"I cosponsored a bill to create a permanent reinsurance program that would provide federal funding to cover 80 percent of insurance claims falling between 50,000 dollars and 500,000 dollars over the next two years.

"After that, federal funding would cover 80 percent of insurance claims between 100,000 dollars and 500,000 dollars.

"One Florida insurer estimated the bill would reduce premiums for Floridians by up to 13 percent.

"We can also work in a bipartisan manner to fund payments that lower Americans' out-of-pockets costs.

"These are the same payments the administration is threatening to end that lower costs for millions of Americans.

"If these payments are stopped, there will be real consequences.

"Working families will face higher premiums and fewer insurance options. In Florida, premiums will increase by 25 percent if these payments are cancelled.

"Higher costs mean fewer folks will be able to afford coverage.

"Our colleagues on the HELP Committee, Chairman Alexander and Ranking Member Patty Murray, have the right idea.

"They have committed to holding a series of hearings with the goal of stabilizing the ACA's insurance market.

"That's a good start and one I hope we can all get behind because, in reality, it's going to take more than just a few of us to improve health care for families back home.

"That said Mr. Chairman, I would welcome working with you or any of my colleagues here to find that path forward."