Pennsylvania Insurance Department Decides Not To Increase Medical Malpractice Limits

Main Category: Litigation / Medical Malpractice
Also Included In: Health Insurance / Medical Insurance
Article Date: 22 Jul 2007 - 0:00 PDT

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Deputy Insurance Commissioner Randy Rohrbaugh today said he has determined that there is not evidence of sufficient market capacity at the current time to mandate an increase in medical malpractice insurance limits in Pennsylvania.

"In making this decision, our priority was to protect the consumers who are accessing health care in the state," Rohrbaugh said. "We did not want to prematurely raise the limits before there is adequate capacity in the medical malpractice insurance marketplace, as this could have an adverse effect on the availability of health care.

"An actuarial study by Pricewaterhouse Coopers shows that since the passage of Act 13 of 2002 and other reforms implemented under Governor Rendell's leadership, there continues to be improvements in the medical malpractice marketplace on many fronts. However, there is not sufficient evidence of additional basic insurance capacity in the market and, therefore, the legal threshold requirement by the legislature has not been met.

"While the data continues to show positive developments, there are concerns that the composition of the current marketplace would not be in a position to absorb greater risk, so it would be irresponsible to allow an increase in limits to $750,000 at the primary insurance layer."

Health care providers in Pennsylvania are required to carry $1 million worth of medical malpractice insurance: the first $500,000 from a commercial insurance company and the remaining $500,000 from the Medical Care Availability and Reduction of Error (Mcare) Fund. Current law mandates that the limits be increased in the event that the Insurance commissioner finds that there is additional basic insurance coverage capacity.

The law proposes that, if the market contained additional capacity, the commercial layer would increase and the Mcare layer would decrease. The law proposed that the increase be to $750,000 of coverage from the commercial market and $250,000 of coverage from the Mcare Fund. Eventually, if the market had the increased capacity, medical malpractice coverage would be provided entirely through the commercial market.

Pennsylvania Insurance Department
http://www.insurance.state.pa.us