The Problem Legislative Solution Bills we Oppose Newsroom Members Video Clips Links  
Recently Passed Lawsuit Reforms Improving Access to Care Proposition 12 Lobby Team Contact Us  
  Newsroom  
 

Texas’ Top Five Physician Liability Carriers Announce Rate Cuts

  
     
  October 3, 2005
TAPA Newsletter

 

Medical Protective, the state’s second largest physician liability carrier, recently announced a five percent rate cut, its second announced rate reduction in six months. The rate cut, which takes effect January 1, represents a reduction of $5 million in premiums. Med Pro’s announcement marks the third announced rate cut for Texas doctors within the past five weeks, according to Austin internist Howard Marcus, chairman of the Texas Alliance For Patient Access.

Just a week prior, Texas Medical Liability Trust, the state’s largest physician insurer, announced a $27.9 million premium reduction—a combination of rate cuts, dividends and discounts for good claims experience. The latest round of cuts takes effect January 1.

In mid-August, American Physicians Insurance Exchange, Texas’ first physician-governed malpractice carrier, announced rate cuts averaging 13 percent for its insured Texas physicians. This latest cut takes effect for all new policies written after August 1 and on all renewing policies after December 1 and represents $9 million in premium reductions.

  
  Texas Medical Association President Dr. Robert Gunby, left, receives news from Texas Medical Liability Trust chair Dr.Dennis Factor that the state's largest physician insurer is cutting rates again. Since the passage of Prop. 12, TMLT has announced rate cuts of 20 percent plus a $10 million dividend to be split among their 13,000 policy holders.

Exchange President Maury Magids attributes the latest rate cuts to the 2003 tort reform measures, which capped non-economic damages against physicians at $250,000.

“We have been cautiously optimistic about the impact of tort reform on the claims environment and now have sufficient data showing significant effects from the tort reform effort,” Magids said.

All five of the state’s largest physician insurers have announced rate cuts this year; most by double-digits, said Dr. Dr. Marcus. These rate cuts will collectively produce nearly $49 million in annualized premium savings for Texas physicians, he added.

Advocate MD, one of the newly licensed Advocate MD, one of the newly licensed carriers, announced a 12 percent rate cut in August, as well.

Shortly after the passage of Proposition 12, The Doctors Company cancelled a planned 20 percent increase. February of this year they announced rate cuts ranging from 9 to 14 percent.

Nineteen months ago the Joint Underwriting Association, the state pool of last resort, sought a 36 percent rate hike. That request was denied by the Insurance Commissioner. March of this year the JUA announced a 10 percent rate cut. The number of physicians enrolled in the JUA has seen a steady decline since January. Texas has added three licensed carriers and 13 risk retention groups since the passage of Proposition 12. The new licensed carriers are Advocate MD of the Southwest, Medical Liability Insurance Company of America, and Physicians Insurance Company.