Maryland's insurance commissioner granted approval yesterday for the state's largest medical malpractice insurer to raise doctors' premiums by 33 percent next year, prompting doctors to renew calls to the General Assembly for immediate relief.
The action shaved several points off a 41 percent increase sought by the Medical Mutual Liability Insurance Society of Maryland, but "it's still a staggering figure for most physicians," said T. Michael Preston, executive director of the Maryland State Medical Society.
Doctors, who say escalating insurance costs are threatening their practices, are pushing legislators to create a state fund that would allow insurers to hold the line on the latest rate increases.
Longer term, doctors argue that curbing jury awards and settlements will be necessary to contain insurance costs. That approach has been championed by Gov. Robert L. Ehrlich Jr. (R) but is vigorously opposed by trial lawyers and their Democratic allies, who advocate better policing of doctors as well as insurance industry reforms.
In a statement issued late yesterday afternoon, Insurance Commissioner Alfred W. Redmer Jr. said he found Med Mutual's 41 percent rate request for next year to be "excessive and thus . . . not allowed under Maryland law."
Med Mutual insures about 75 percent of physicians in Maryland, according to the state Insurance Administration. The company raised rates by 28 percent this year after a decade during which premiums had remained flat or increased by only a few percentage points.
The latest rate increase will cost most doctors thousands of dollars, though insurance costs vary depending on such factors as the doctor's specialty and location. Mark S. Seigel, an obstetrician-gynecologist in Montgomery County and president of the Medical Society, recently testified that he pays $70,000 a year in malpractice insurance. A 33 percent increase would cost him an additional $23,100.
Med Mutual, which declined to comment on Redmer's decision, blames a sharp increase in the size of jury awards and settlements for its recent increases. The company says its payouts in malpractice cases in Maryland jumped from $48.3 million in 2000 to $93.2 million in 2003.
Donald J. Hogan Jr., an Ehrlich policy aide, said yesterday's announcement will not affect the work of a task force set up by the governor to find comprehensive solutions to the medical malpractice crisis.
"You've still got a huge, huge problem that's not going away," Hogan said.
Dennis O'Brien, public relations chairman for the Maryland Trial Lawyers Association, said his organization continues to favor the idea of a state fund, which has been advanced by Senate President Thomas V. Mike Miller Jr. (D-Calvert).
Miller is drafting legislation that would help the state's insurers pay damages in cases after they exhaust the money they have collected in premiums from doctors. In return, the insurers would be required to freeze rates at or near current levels.
Miller has not said how his proposal would be funded. Among ideas under consideration is an additional fee paid by those convicted of drunken driving.
Miller has advocated a special session of the General Assembly to enact his legislation before next year's rate increases take effect in January. Ehrlich also has advanced the idea of a special session but would prefer to pass broader legislation that includes long-term solutions, aides say.