The nation has not officially entered a hard market for medical liability premiums like the one seen in the early 2000s, but “there are signs that such conditions may become a reality in the near future,” a report from the AMA warns.
The AMA’s “Medical Liability Reform NOW! 2025” (PDF) gives physicians and physician advocates the facts they need to address the broken medical liability system, including information to advocate and defend proven medical liability reform legislation.
Medical liability reform is important for physicians given that a research paper (PDF) from the AMA found that 31% of all physicians had been sued at some point in their careers. Among physicians 55 or older, nearly half said they had been sued at some point in their career. Among general surgeons and ob-gyns in that age group, more than 75% said they had been sued.
Meanwhile, a study from the Medical Professional Liability Association showed that 65% of claims closed between 2016 and 2018 had been dropped, dismissed or withdrawn. Further, out of the 6% of claims filed that were ultimately decided by a trial verdict, defendants won 89% of the time.
“Taking action to improve the medical liability environment is important because it ultimately affects patients’ access to care,” said Allen Hardiman, PhD, senior economist for the AMA. “A substantial body of research, for example, has found that caps on noneconomic damages were associated with a greater availability of physicians to treat patients.”
The newly updated AMA resource includes background on the problems with the current system, proven solutions to improve the liability climate, state efforts to enact caps on noneconomic damages, ballot initiatives, federal liability reforms and discussion about innovative reforms that could complement traditional medical liability reform provisions, including health courts.
What the data shows
Medical liability insurance experts are concerned the nation’s physicians may be edging toward a hard insurance market—that is, a market in which premiums rise quickly and insurance coverage can be difficult to find. The period of market stability seen after the early 2000s has been slowing down since 2019.
The share of premiums that rose year-to-year went up significantly in 2019, with the proportion of premiums that went up in 2018 almost doubling in 2019. In 2020, 31.1% of premiums increased from the previous year and after a dip in 2021, more than 36% of premiums increased in 2022. That is according to data from the Medical Liability Monitor, considered the most comprehensive source of data on medical liability insurance premiums from a national perspective.
By 2024—the most recent year for which data is available—nearly half of reported premiums rose from the previous year, 49.8%. That marks the highest proportion observed since 2005. In 2024:
- The average change in premiums across the nation was 2.5%, up from 1.0% in 2020.
- 16 states saw at least some of the premiums reported increase by 10% or more, up from 12 states in 2021.
- 45 states and the District of Columbia saw premium increases, more widespread than increases were in previous years.
- A number of states appear to be experiencing hard markets, including Illinois, where 90.7%, 81.5% and 88.2% of its premiums increased respectively in each of the last three years.
“To put it in perspective, however, at this stage the current hard market is not as severe and is spreading at a lower pace than the last liability crisis,” the “Medical Liability Reform NOW!” document explains. “How severe and widespread the current hard market may become is still uncertain hence, the next editions of the [Medical Liability Monitor] data are awaited with great anticipation.”
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State medical liability reform
In addition to efforts on the federal level, the 26-page document from the AMA includes up-to-date information on what reforms individual states have passed when it comes to a cap on the noneconomic damages that plaintiffs are able to collect in medical liability cases.
Noneconomic cap damages, the amount juries award for pain and suffering, were first passed in California during a medical liability crisis in the 1970s. Caps are considered a gold standard in helping keep liability insurance rates reasonable for physicians while still compensating patients justly.
As of January, about half of the nation’s states have some variation of a cap on noneconomic damages. Six states, including Colorado, place a cap on total damages a jury is able to award. There have been some changes made in the past year.
In June 2024, Colorado voted to incrementally increase its medical liability wrongful death damages limitation to $1.575 million over five years. After that, the cap will be adjusted biennially for inflation. Before the new law, Colorado limited noneconomic damages to $300,000. Beginning Jan. 1, 2025, the amount began incrementally increasing so that the limit reaches $875,000 over five years. It will be adjusted biennially for inflation after that.
Meanwhile, Montana had a $250,000 cap on noneconomic damages before this year. In 2025, Montana increased its cap to $300,000. On Jan. 1, 2026, the cap is set to rise to $350,000; in 2027 it will rise to $400,000; in 2028 it goes to $450,000 and then to $500,000 on Jan. 1, 2029. After that, the cap will increase annually by 2% of the previous year’s limit.
“Medical liability remains a continuing concern for physicians. It affects both how and where they practice,” the “Medical Liability Reform NOW!” document concludes. “The ramifications of the broken liability system are wide-ranging, from patients who now have limited access to health care to the financial implications on the health care system as a whole. A growing number of policymakers from both sides of the aisle agree that this issue needs to be addressed. The AMA remains committed to advocating for proven reforms—such as caps on noneconomic damages—to fix the problem.”
The AMA also has assembled a newly updated state medical liability reform chart (PDF) that covers a number of different categories, including damage caps, collateral source reform and more. A second chart (PDF) covers laws regarding arbitration or pre-trial screening panels, statutes of limitation, expert witnesses and qualifications, and affidavits or certificates of merit.
