In 2022, the proportion of medical liability insurance premiums that increased from the previous year was 36.2%—the highest rate seen since 2005.
And among the premiums that increased last year, the average hike was 8.1%.
2022 marks the fourth straight year in which the share of medical liability insurance premiums with a year-to-year increase was significantly higher than in the last two decades, according to an AMA Policy Research Perspectives report published in April (PDF). The volatility began in 2019, when the proportion of premiums that increased reached about 27%, nearly double the rate from the previous year. Between 2020 and 2022, roughly 30% of premiums increased year-to-year, the analysis shows.
“There is a growing consensus that a hard medical liability insurance market exists in a considerable number of states and is slowly spreading across the U.S. as more physicians face higher insurance premiums,” said AMA President Jack Resneck Jr., MD. “For physicians who can still obtain coverage in a hard market, the skyrocketing costs may force physicians to relocate away from certain high-cost states or drop certain critical services that raise their liability risk. These tough choices can lead to reduced access to care for patients.”
The AMA is committed to keeping medical liability insurance premiums stable through its work with state and specialty medical associations and other stakeholders to pursue traditional and innovative medical liability reforms. Reforms are essential to ensuring that patients do not lose access to physicians and a full range of health care services.
The 2023 edition of “Medical Liability Reform NOW!” (PDF) gives physicians the facts they need to address the broken medical liability system, including updates on state laws, innovative reforms, efforts to reform the system at the federal level, and high-impact court cases at the federal and state levels.
15 states feeling it the most
Fifteen states reported double-digit percentage increases in premiums in 2022. That’s up from 12 states that reported increases at that rate in 2021. The states—followed by the proportion of premiums that increased 10% or more between 2021 and 2022—are:
- Illinois—63.6%.
- New Mexico—33.3%.
- Oregon—26.7%.
- Kansas—20%.
- South Dakota—20%.
- Kentucky—20%.
- Massachusetts—16.7%.
- Montana—16.7%.
- Missouri—14.8%.
- South Carolina—11.1%.
- West Virginia—6.7%.
- Maine—6.7%.
- Virginia—6.4%.
- Nevada—5.6%.
- Georgia—4.8%.
The largest premium increases in these states ranged from 10% in Maine and Montana up to 40.9% in Kansas.
The AMA report notes that six of the 15 states have experienced large premium increases for at least three years: Illinois, Oregon, Kentucky, Missouri, South Carolina and Georgia. West Virginia has now experienced large premium increases for two years in a row.
The report explains that measuring the proportion of premiums that went up by any amount also tells more of the story. For example, in Georgia, 4.8% reported premiums increased by 10% or more; however, 71.4% reported premiums rose by some amount. In Illinois, 90.7% of premiums increased in 2022.
COVID-19 not to blame
While the climb in premiums began some time before the COVID-19 pandemic did, analysts say that the pandemic’s effect on the market “has been largely inconsequential.”
The temporary reduction in health care provided when the pandemic hit in 2020 created a lower exposure to risk of claims. Most who responded to the 2022 survey said they don’t expect an influx of COVID-19-related claims. However, if there are claims, those surveyed expect they would occur in the year following the 2022 survey.
Reforms matter
Tort reform was key in stabilizing medical liability insurance premiums in the hard market of the early 2000s, but courts have overturned some of those reforms.
The 2022 medical liability premium data showed “striking differences” based on geography, the AMA analysis notes. For example, some California ob-gyns paid premiums of just under $50,000 last year. Meanwhile, in Miami-Dade County, Florida—some ob-gyns faced more than $226,000 annually for medical liability insurance premiums.
The AMA report uses new data published annually in Medical Liability Monitor, considered the most comprehensive source of data on medical liability insurance premiums from a national perspective.
Medical Liability Monitor annually surveys major U.S. liability insurers and reports manual premiums for obstetrics and gynecology, general surgery and internal medicine in each state where those insurers provide coverage.
The data directly compares how many premiums rose, fell or stayed the same from one year to the next and is a useful indicator of whether premiums in the aggregate have been changing, in which direction and by how much. The data doesn’t reflect all insurers or all physician specialties and are for manual premiums, which could be different than the final premiums physicians pay.
