14 states identified as leading the swing to higher costs for medical liability insurance coverage

Medical liability insurance premiums have begun an upward trend after holding more or less steady during the past decade, according to a new analysis from the American Medical Association (AMA). In 2020, during the height of the COVID-19 pandemic, more than 30 percent of premiums reported on a survey of liability insurers increased from the previous year, the highest percentage since 2005.

For a second consecutive year there has been an exceptional surge in the percentage of premiums with a year-to-year increase. Between 2010 and 2018, the share of premiums that increased maintained a somewhat stable pattern, ranging from 12 percent to 17 percent. In 2019, that proportion almost doubled to 26.5 percent and went up again in 2020 to 31.1 percent.

According to the AMA analysis, “the responsiveness of premiums to changes in their determinants and external factors takes considerable time in the medical liability insurance market. Therefore, although some 2020 premiums may have been set after the onset of the [COVID-19] pandemic, it was still too early for them to be affected by it.”

“Increases in medical liability premiums compound the economic stress on medical practices as the COVID-19 pandemic resulted in significant reductions to patient volume and revenue, and higher expenses for scarce medical supplies,” said AMA President Susan R. Bailey, M.D. “Practice revenue has not fully recovered as the pandemic has stretched on and a protracted upward trend in medical liability premiums will threaten the viability of many practices that already face a difficult road to recovery.”

The AMA analysis identified the 14 states that had premium increases of 10 percent or more. Those states and their shares of reported premiums that increased by such magnitude in 2020 are: Kentucky (29.6 percent), South Carolina (27.8 percent), Maryland (18.8 percent), Nebraska (16.7 percent), Oregon (16.7 percent), Montana (16.7 percent), Georgia (14.8 percent), Missouri (14.8 percent), New Hampshire (13.3 percent), Illinois (11.9 perent), Michigan (11.6 percent), Texas (9.2 percent), North Carolina (6.7 percent), and Virginia (1.3 percent).

The AMA report also finds striking differences in premiums by geography. For example, in 2020 some physicians in OB/GYN faced base premiums ranging from $49,804 in Los Angeles County, California to $205,380 in Miami-Dade County, Florida.

“Keeping medical liability premium growth in-check is imperative to ensure patient access to care is not jeopardized by unaffordable liability insurance costs that make it impossible for physicians to remain in practice,” said Dr. Bailey. “This concern is particularly pressing given the negative impact that the COVID-19 pandemic has had on access and practice viability, as many physicians have had to suspend patient visits or elective procedures, and some have had to close their practices.” 

Together with state medical societies, the AMA is pursuing 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. This includes limited and targeted emergency protections for physicians who continue to treat patients during the pandemic without adequate resources and support. 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!

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 where the responding insurers provide coverage.

The AMA offers medical practices a growing list of tools and resources to support physicians as the COVID-19 pandemic evolves. Additional details on clinical information, guides, advocacy and medical ethics are available at the AMA COVID-19 Resource Center.