CHICAGO — A protracted period of upward volatility in medical liability premiums has extended into a fourth consecutive year and suggests a hard insurance market has spread across many states making it difficult for physicians to find affordable coverage, according to an analysis (PDF) issued today by the American Medical Association (AMA). The prevalence of year-to-year increases in medical liability premiums between 2019 and 2022 has not been observed in two decades.

“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., M.D. “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.”

While the share of medical liability premiums with year-to-year increases was increasingly stable between 2013 and 2018, the AMA analysis shows the prolonged period of upward volatility began in 2019 when the proportion of premiums that increased was about 27%, almost double the rate from 2018. Between 2020 and 2022, roughly 30% of premiums increased year-to-year. The proportion of premiums with increases in 2022 was 36.2%, a higher rate than any other year since 2005. Among premiums that went up in 2022, the average increase was 8.1%.

Fifteen states reported double-digit percentage increases in premiums in 2022, up from 12 in 2021. As in 2021, Illinois leads the latest list of states with the largest proportion (63.6%) of premiums that increased 10% or more, followed by 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%), and Georgia (4.8%). The size of the largest premium increase in these states ranged from 10% in Maine and Montana to 40.9% in Kansas.

The AMA analysis also found striking differences in premiums by geography. For example, in 2022 some obstetricians and gynecologists faced base premiums ranging from $49,804 in Los Angeles County, California to $226,224 in Miami-Dade County, Florida.

While the surge in upward premium changes largely coincided with the COVID-19 pandemic, the AMA analysis notes “the effects of the COVID-19 pandemic on the medical professional liability market has been largely inconsequential” and expectations are low for future influx in COVID-related claims.

In the wake of the last hard market during the early 2000s, tort reform proved to be a key contributor in stabilizing medical liability insurance premiums. However, over the past decade, some of those reforms have been overturned in various states, opening the door for increased claims severity and frequency. Together with state medical societies, the AMA is fighting to preserve and expand both traditional and innovative medical liability reforms to preserve premium stability and meet the needs of millions of Americans who need affordable, accessible medical care. For more information on AMA solutions to reshape the current medical liability system to better serve both physicians and patients, please read Medical Liability Reform– Now! (PDF).

The newly released AMA analysis on medical liability insurance premiums is based on an annual survey of professional liability insurers conducted by the Medical Liability Monitor (MLM). The MLM reports base premiums for three specialties in each state and sub-state area where the responding insurers provide coverage.