Research by the American Medical Association (AMA) finds 15 states reported double-digit percentage increases in premiums in 2022.
Physicians are facing higher medical liability insurance costs for the fourth year in a row, according to analysis by the AMA.
The report, based on an annual survey of professional liability insurers conducted by the Medical Liability Monitor (MLM), found that the proportion of premiums with increases in 2022 was 36.2%, the highest rate in any year since 2005. The average premium increase for 2022 was 8.1%.
The prevalence of year-to-year increases in medical liability premiums from 2019 to 2022 has not been observed since the early 2000s, AMA stated.
"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," AMA president Jack Resneck Jr. said in a statement. "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."
After medical liability premiums were mostly stable between 2013 and 2018, the upward trend began in 2019 when the proportion of premiums that increased was almost double from the year before, rising from 13.7% to 26.5%. The proportion of premiums that increased went up again in 2020 to 31.1% before taking a slight dip in 2021 to 29.5%.
Double-digit percentage increases in premiums were reported in 15 states in 2022, up from 12 in 2021. Illinois once again had the largest proportion of premiums that increased by double digits (63.6%), followed by New Mexico (33.3%), Oregon (26.7%), Kansas (20%), South Dakota (20%), Kentucky (20%), Massachusetts (16.7%), Montana (16.7%), Maine (6.7%), Virginia (6.4%), Nevada (5.6%), and Georgia (4.8%). Premium increases varied in these states from 10% in Maine and Montana to 40.9% in Kansas.
The analysis also found a wide variation in premiums depending on geography in 2022. For example, OB/GYNs dealt with premiums ranging from $49,804 in Los Angeles County, California, to $226,224 in Miami-Dade County, Florida.
As AMA noted in their analysis last year, the current rise in medical liability premiums is not as severe as the last "hard market" that took place in the early 2000s. The report highlights that two differences compared to the last hard market are that the medical professional liability (MPL) insurance industry is in a much better financial position now and that there is currently a smaller MPL market on the demand side.
"Nonetheless if current trends continue, even if slower and less severe than the last hard market, this medical liability pressure could have detrimental effects on health care markets, such as an increase in defensive medicine, lower physician supply, and thus reduced access to care," the analysis concluded.
Jay Asser is the contributing editor for strategy at HealthLeaders.
KEY TAKEAWAYS
The American Medical Association's analysis of the medical professional liability insurance market revealed a rise in premiums for a fourth consecutive year.
The surge in premiums from 2019 to 2022 has not been felt in two decades, with the proportion of premiums with increases in 2022 at 36.2%, the highest rate in any year since 2005.
While the medical professional liability insurance market is in a better position than it was during the last "hard market" in the early 2000s, the current trend can still contribute to reduced access to care.