Malpractice insurance costs: No cuts in sight

Malpractice insurance costs are on a seven-year stretch of annual price increases, according to the latest data from the American Medical Association (AMA).

The premium costs for medical professional liability insurance have not reached crisis levels yet, although some states are facing back-to-back double-digit price jumps, according to AMA.

The findings were in an analysis of the Medical Liability Monitor (MLM) annual rate survey from 2016 to 2025. AMA published the results in this month’s Policy Research Perspective report, “For the seventh consecutive year, medical liability premiums continue to rise,” by AMA Lead Economist Allen Hardiman, Ph.D. MLM collects premiums from U.S. medical liability insurers, broken down by specialty and geography, and is considered a comprehensive source of nationwide MPL premium data, covering companies that account for 60% to 80% of the market.

Not yet a national crisis — but a warning sign

The AMA report noted the seven-year rise is significant, but it has not yet reached the severity of the early 2000s hard market. In 2003 and 2004, 77.4% and 82.1% of premiums rose, respectively. Some general surgeons in Miami-Dade County faced manual premiums as high as $277,241 in 2004.

Still, the report's conclusion carries a clear warning for physicians, patients and policymakers: If the trajectory in malpractice premiums continues, it could negatively affect patients' access to care.

"While a nationwide hard market has not yet emerged, certain states are already experiencing hard market conditions," the report states, citing Illinois and Pennsylvania as examples of states where the trend has been sustained over multiple consecutive years.

“Although there was a continued rise in MPL premiums over the past seven years, the severity and the magnitude of this rise pale in comparison to the hard market in the early 2000s,” Hardiman wrote in the report. “Nevertheless, if this upward trajectory continues to worsen in the future, it could lead to a negative impact on patients’ access to care.”

What specialties are involved?

The report tracked premiums for three physician specialties — general surgery, obstetrics-gynecology (ob-gyn), and internal medicine — across states and, in some cases, sub-state regions. Hardiman noted that tracking only three specialties is a limitation in the data, and that insurers in each state can change over time due to market conditions. The manual premiums reported by the MLM do not reflect credits, debits, dividends or other factors that may adjust individual physician costs, meaning actual premiums paid can differ from the figures cited.

Even with limitations of the data, several trends emerged.

A seven-year climb

Years 2016 to 2018 were a period of relative stability, with 80.8% of premiums staying flat in 2018.

That changed in 2019, when the share of premiums experiencing any increase nearly doubled, rising from 13.7% in 2018 to 26.5% the following year. The climb continued steadily, peaking in 2024 when 49.8% of reported premiums rose from the prior year.

In 2025, that figure dipped to 39.9%; the report notes that apart from the 2024 peak, it was the highest rate since 2005. That year, 65.5% of premiums rose, near the apex of the early 2000s hard market in medical liability insurance, a period defined by sharply rising costs, tighter underwriting and reduced coverage availability.

Meanwhile, the share of premiums that decreased has fallen dramatically. In 2016, 9.4% of premiums declined. By 2025, only 3.1% dropped.

States facing the steepest increases

While premium increases were widespread — 36 states reported at least one premium increase in 2025 — the most severe jumps were concentrated in a handful of states. Eleven states had at least one premium rise by 10% or more between 2024 and 2025.

Pennsylvania led the list, with more than half of its reported premiums rising by at least 10%. Nearly all reported premiums in the state — 92.2% — went up in 2025, with the largest single increase reaching 29.6%. New York saw an even higher proportion of overall increases: 95.7% of its reported premiums rose in 2025, though its largest single jump was 11%.

Five of the 11 states with large 2025 increases — Pennsylvania, Kentucky, Florida, Illinois and New York — also experienced increases of 10% or more in 2024, meaning physicians in those markets have absorbed significant consecutive-year hikes. The report notes that Pennsylvania has now seen notable premium increases for three consecutive years, while Illinois has shown the same pattern since 2020.

Other states with at least one premium rising by 10% or more in 2025 include Rhode Island, Kansas, Utah, South Carolina, Georgia and West Virginia.

Eighteen states had at least half of their reported premiums increase in 2025. While that is down from 22 states in 2024, it remains above figures from the three prior years — 13 states in 2023, 15 in 2022 and six in 2021.

Specialty and geography drive big differences in premium levels

The report also highlighted stark differences in premium levels across specialty and geography.

“In general, the reported premiums for obstetrics-gynecology and general surgery were significantly higher than for internal medicine, which is in line with the higher liability risk faced by both specialties,” the report said. It was released with a companion analysis about frequency of malpractice claims.

Internal medicine physicians consistently pay far less than their surgical colleagues. In Miami-Dade County, Florida, for example, the reported 2025 manual premium for an internal medicine physician was $59,736, while obstetricians/gynecologists and general surgeons faced premiums of $243,988. In Connecticut, the range ran from $22,467 for internal medicine to $159,537 for OB/GYN.

Tort reform to cap insurance costs?

The AMA report did not offer specific premium management recommendations.

But “previous research provides consistent evidence that caps on non-economic damages are associated with reductions in claim frequency and claim payments, which subsequently affect the premiums insurers charge,” the report said. It’s a policy lever that varies significantly by state and remains a focus of ongoing medical liability reform efforts.

State tort law plays a significant role in premium levels. California, which caps noneconomic damages under the Medical Injury Compensation Reform Act (MICRA), has consistently lower premiums than other states across all three specialties, the report said. For internal medicine physicians in Los Angeles, the 2025 manual premium was $8,274, compared with $41,775 for general surgery and $49,804 for ob-gyn. California's average premiums were unchanged between 2024 and 2025, and rose only 1.5% on average between 2023 and 2024, compared to the broad increases seen elsewhere.

California’s MICRA cap was $250,000 on noneconomic damages through 2022, rising to $350,000 in January 2023, with incremental increases planned through the next decade reaching $750,000 — which coincided with an 11.6% average premium increase in California that year before stabilizing.