MEDICAL MALPRACTICE COSTS

Medical malpractice insurance carrier raises rates 45 percent average


Published: Friday, January 2, 2004 at 6:01 a.m.
Last Modified: Thursday, January 1, 2004 at 11:07 p.m.

One of Florida's medical malpractice insurance carriers is raising its 2004 premiums an average of 45 percent.

Facts

FYI: Rate increases

Several insurance companies last year said their rate increases wouldn't be as big as they otherwise would have been if the sweeping malpractice law hadn't passed last summer. The new law limits how much victims can collect in noneconomic damages in most medical malpractice cases.

Indiana-based GE Medical Protective, which covers about 2,500 Florida doctors, said Wednesday that its increase had been approved by the state Office of Insurance Regulation.

Company spokesman John Novaria said the increase was prompted by the rising cost of settling lawsuits out of court and inflation in health care. He declined to quantify those costs.

``When you think about how medical costs will rise in the future, it becomes apparent that the costs of providing medical care to a plaintiff years down the road are astronomical,'' Novaria said. ``In order to meet those costs, we have to ask for higher premiums.''

GE Medical Protective is one of about six carriers that actively write these policies in Florida.

Novaria said the approximately 450 Florida physicians whose policies are up for renewal in January will be offered insurance at new rates.

Last fall, the company told those doctors that it couldn't renew them because it didn't know what their new rates would be.

State insurance officials hadn't yet calculated the impact of changes made by lawmakers earlier last year, and state law requires these insurers to notify policyholders well before a rate increase or cancellation goes into effect.

Several insurance companies last year said their rate increases wouldn't be as big as they otherwise would have been if the sweeping malpractice law hadn't passed last summer.

A driving force behind the new law was the rising cost of medical malpractice insurance in Florida that was causing some doctors, especially those in high-risk specialties, to reduce their practices or quit them altogether.

The new law limits how much victims can collect in noneconomic damages, such as for pain and suffering, in most medical malpractice cases. Insurers say that rising damage awards have caused them to dramatically raise rates, and many companies have stopped writing malpractice policies altogether.

Many have said they expected to be able to show need for a rate increase based on their losses.

Lisa Miller, a spokeswoman for Florida's Office of Insurance Regulation, said GE Medical Protective made a solid case for its requested increase.

``Their overall losses in this market justified the rate increase,'' she said. ``It was actuarially supported. It really kind of brings them in line with the other carriers in the marketplace, and allows them to be able to continue to offer coverage.''

Miller said state regulators so far have approved only one other rate increase for a malpractice carrier: 8 percent for Jacksonville-based First Professionals Insurance Co., Florida's largest insurer of this kind.

Companies have until Jan. 9 to submit their filings to the state. So far, they have asked for rates from 7 percent to 17 percent higher than last year.

The 45 percent average increase will vary among doctors and their specialties, Novaria said. GE Medical Protective is notifying its policyholders of the new rates by mail, starting with those up for renewal this month.

About 700 Florida doctors have policies that are up for renewal during the first three months of this year.

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