Medical Malpractice Liability Premiums Remain Flat: Survey

October 10, 2016

The medical malpractice insurance industry’s premiums remain essentially flat, having dropped only very slightly (0.1 percent) from last year across the industry, according to the 2016 Medical Liability Monitor Annual Rate Survey.

For 75 percent of insurers in the survey, rates remained the same between 2015 and 2016, slightly higher than the percentage with no manual change shown between 2014 and 2015 (71 percent).

“The stability of medical malpractice premium rates is a stark contrast to the tumult occurring in other segments of the U.S. healthcare delivery system as a result of the reforms spurred by the Affordable Care Act,” said Michael Matray, editor of Medical Liability Monitor.

Just under 80 percent of respondents said they believe the market is neither hardening or softening. Only 20 percent of respondents felt the market is getting softer, down from 43 percent who felt rates would continue to deflate last year.

The survey reports rates effective July 1, 2016 by state, territory and insurer for each of three medical specialties—internal medicine, general surgery and OB/Gyn.

According to this latest survey, the Northeast and the Midwest are showing overall average rate increases, albeit very slight increases of 0.8 percent and 0.3 percent, respectively. According to the authors, the increase for the Northeast is driven by a significant increase in the Pennsylvania Patient Compensation Fund (PCF) surcharge, resulting in Pennsylvania rates increasing roughly four percent as well as a modest increase in Rhode Island. Decreases in Connecticut and Maine partially offset the increases in Pennsylvania and Rhode Island.

The increase for the Midwest is also partially driven by increases to the PCF surcharges in Indiana and Nebraska. There was a modest increase for Illinois. The increases are almost offset by the slight decreases for Kansas and Michigan.

The South and West regions both show average decreases of less than 1 percent—0.7 percent and 0.5 percent, respectively. In the South, three states show slight average rate increases, while five states show decreases. Increases are in Georgia (0.3 percent), Kentucky(2.5 percent) and South Carolina (0.4 percent), while decreases are in Florida (3.7 percent), Louisiana (6.7 percent), North Carolina (3.1 percent), Oklahoma (1.3 percent) and Texas (0.5 percent).

In the West, there are two states with overall average increases. California is showing an average manual rate increase of 2.4 percent, driven by an increase of just under 10 percent for one of the dominant writers in the state. There are implied average decreasing manual rates in four states in the West region—Arizona (8.6 percent), Colorado (6.3 percent) , Idaho (1.8 percent) and Wyoming (2.7 percent).

Source: Medical Liability Monitor

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