Liability Insurance Premiums Spike Across the U.S.: AMA Report by Ken Terry
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iability insurance premiums are rising at a rate not seen in nearly 20 years, according to a new report from the American Medical Association (AMA).
While the report is based on premium increases that predated the COVID-19 pandemic, it cites experts who predict that the upward trend in insurance costs will continue. These forecasts come from the actuaries who produce the Medical Liability Monitor’s (MLM) annual survey on liability insurance costs, which provided the data for the AMA study. The research examined premium levels in select geographic areas of the United States from 2011 to 2020. ”In 2019 and 2020, the proportions of premiums that increased year-to-year reached highs not seen since the 2000s,” said the paper, which was written by Jose R. Guardado, PhD. “In 2019, this share almost doubled from 2018, and then it went up again in 2020, when more than 30% of premiums increased from the previous year.” Specifically, the share of insurance premiums that increased in 2019 rose to 26.5% from 13.7% the previous year, the report said. In 2020, the proportion of premiums that grew increased 31.1% over the previous year.
that much, but the largest rate rise in that state (10.8%) was well below the largest increases in most states that had fewer big increases. In Virginia, where only 1.3% of premiums grew by 10% or more, the largest increase was 27.6%. Cost Increases Limited On average, liability insurance premiums across the industry rose by only a few percentage points last year, said Richard Anderson, MD, chairman and CEO of The Doctors’ Company, a large physician-owned liability insurer, in an interview with Medscape Medical News. Moreover, he stressed, this was the first broad-based increase in premium costs after 15 years of consistent rate decreases. But Susan Bailey, MD, president of the AMA, told Medscape Medical News that the rate hikes are coming at a bad time for physicians.
”It’s important to keep liability premium growth in check, because physician pracIn 2020, premium increases of tices have been incredibly 10% or more were documentstressed during the pan”Liability insurance premiums are rising ed in 14 states. Among these demic: Their patient numat a rate not seen in nearly 20 years...” were Kentucky, where 29.6% bers are down, their reof rate hikes exceeded 10%, imbursements are down, South Carolina (27.8%), Marytheir burnout is up,” she land (18.8%), Nebraska (16.7%), Oregon (16.7%) Montana said. “To add an increased liability premium on top of all (16.7%), Georgia (14.8%), Missouri (14.8%), New Hamp- those negative impacts of COVID-19 — there are some shire (13.3%), Illinois (11.9%), Michigan (11.6%), Texas practices that won’t be able to pay the premiums. Some (9.2%), North Carolina (6.7%), and Virginia (1.3%). practices will be forced to close or to change in some way, and that would be a terrible outcome of the pandemic.” According to the report, the size of the rate hikes was not related to the proportion of increases over 10% in a par- The AMA report found wide geographic variations in the ticular state. South Carolina, for instance, ranked second size of 2020 premiums. For example, general surgeons and in terms of the fraction of premiums that increased by ob/gyns paid premiums of $41,775 and $49,804, respec-
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