More Medical Liability Premiums Increased in 2022, AMA Finds

April 25, 2023 - More than 35 percent of medical liability premiums increased in 2022, marking the highest rate in almost two decades, an analysis from the American Medical Association (AMA) found.

The analysis includes 2013 to 2022 data from the Medical Liability Monitor (MLM), which surveys major US liability insurers. The MLM reports base premiums for obstetrics/gynecology (OB/GYN), general surgery, and internal medicine physicians.

The share of medical liability premiums that increased has grown higher in the last four years than in any year since the 2000s. Premiums were generally stable through 2018 when 80.8 percent stayed the same as in the previous year. In contrast, just 56.1 percent of premiums remained the same in 2022 as in 2021.

The proportion of premiums that went up increased from 13.7 percent in 2018 to 26.5 percent in 2019. This trend continued in 2020, with the share rising to 31.1 percent. The share of premiums that increased fell slightly in 2021 to 29.5 percent but grew again to 36.2 percent in 2022, which was higher than in any year since 2005.

Among premiums that rose in 2022, the average increase was 8.1 percent, the analysis found.

Premium increases varied by state. Nearly 70 percent of premium increases occurred in ten states and 78 percent were in 15 states. As in 2021, Illinois saw the largest share of premiums that grew by 10 percent or more, with 63.6 percent of premiums seeing double-digit percentage increases.

The following states also reported premium increases of 10 percent or more:

• New Mexico (33.3 percent)
• Oregon (26.7 percent)
• Kansas (20 percent)
• South Dakota (20 percent)
• Kentucky (20 percent)
• Massachusetts (16.7 percent)
• Montana (16.7 percent)
• Missouri (14.8 percent)
• South Carolina (11.1 percent)
• West Virginia (6.7 percent)
• Maine (6.7 percent)
• Virginia (6.4 percent)
• Nevada (5.6 percent)
• Georgia (4.8 percent)

These premium increases ranged from 10 percent in Maine and Montana to 40.9 percent in Kansas. Seven of the 15 states experienced double-digit percentage increases in 2021 as well.

“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 US as more physicians face higher insurance premiums,” Jack Resneck Jr., MD, president of AMA, said in a press release.

“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 analysis also revealed geographic variation in premium amounts. OB/GYNs saw 2022 base premiums ranging from $49,804 in Los Angeles County, California, to $226,224 in Miami-Dade County, Florida, indicating a 454 percent difference. This difference was even higher for internists in these two counties at 677 percent.

Additionally, premiums varied by specialty, which AMA said is less surprising due to the known differences in liability risk. In all geographic areas examined in the analysis, premiums for general surgeons were higher than those for internists. Premiums for OB/GYNs were higher than those for general surgeons except in Miami-Dade County, where they were the same.

For example, in Philadelphia County, Pennsylvania, premiums were $31,909 for internists, $105,013 for general surgeons, and $185,565 for OB/GYNs. In Cook County, Illinois, premiums ranged from $47,788 for internists to $208,821 for OB/GYNs.

Although the increases in medical liability premiums coincided with the COVID-19 pandemic, AMA said the pandemic has not impacted the medical professional liability market.

During the last hard market in the early 2000s—when premiums were high—tort reform helped stabilize medical liability insurance premiums, AMA noted. However, some of those reforms have been overturned in various states over the past decade.

If the current hard market continues, the healthcare industry could face repercussions, including increased defensive medicine, lower physician supply, and reduced access to care.