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ALISA ULFERTSMedical malpractice rates will increase, just not as much as insurance companies had planned.
TALLAHASSEE - The Legislature's attempt to rein in the cost of medical malpractice insurance will mean an 8 percent reduction in what insurance companies planned to charge, state insurance regulators said Monday.
Still, most doctors should expect to pay higher premiums even with the reduction, the regulators said.
Two of the biggests players in the debate, doctors and lawyers, expressed disappointment at Monday's announcement. But insurance companies said no one should be surprised.
"That's what the insurance companies said when we testified" before lawmakers, said Sam Miller, spokesman for the Florida Insurance Council.
The law limits the amount of noneconomic damages, such as pain and suffering, that patients can collect. And it requires state regulators to determine how much of an effect the law had on the market. The law calls it the "presumed factor."
The presumed factor for the first year will be 7.8 percent. That means a company that wanted to raise rates by 20 percent will be allowed an increase of only 12.2 percent. Insurers have until Jan. 1 to adopt the new rate, which takes effect retroactively Sept. 15.
While the new law won't immediately reduce rates, "it ultimately will add some stability to the market," said Steve Roddenberry, deputy director of the Office of Insurance Regulation.
That stability should draw more companies to offer insurance, increase competition and lower rates, Roddenberry said.
Some of that already has happened. Two new companies have been approved by the state to write limited medical malpractice policies in Florida, and two more have filed for approval. This summer just four companies offered policies.
But not everyone agrees with Roddenberry's optimistic scenario.
Trial lawyers said Monday's announcement proves what they contended all along: The Legislature's malpractice solution did little to reduce rates.
"What we've got is something that continues to help insurance companies generate profits," said Tom Edwards, head of the Academy of Florida Trial Lawyers' insurance committee.
"If you're going to hurt the doctors and you're going to hurt the consumers, the insurance companies should feel some of that pain," Edwards said. But that isn't happening, he said.
The Florida Medical Association, which wanted an even tighter rein on jury awards, also expressed disappointment.
"Had the reforms we lobbied passed into law, doctors over the next two to three years would be seeing a real decrease in their rates. Instead, the weaker version passed resulting in a mere slowing of increases," said Sandra Mortham, chief executive officer of the FMA.
"When the invoices start hitting the doctors' offices they are going to be very disappointed," Mortham said.
The legislation passed this summer limits a doctor's liability for noneconomic damages in most lawsuits to $500,000, although a cap of $2.5-million is possible in very limited cases.
The new law came after a series of failed special legislative sessions, and after doctors curtailed practice in highrisk specialties such as obstetrics because of skyrocketing insurance rates.
If an insurance company believes that factoring in the 7.8 percent reduction would result in an "excessive, inadequate, or unfairly discriminatory rate," it can appeal to regulators.
- Information from the Associated Press was included in this report.