Texas regulators have rejected a request for a malpractice insurance rate hike by the state's insurer of last resort, saying the hike does not account for savings that will be realized through the state's new cap on noneconomic damages.
The Texas Joint Underwriting Association, which insures 2,500 doctors and 29 hospitals, had filed for a rate increase of 35% for doctors and 68% for hospitals, effective Dec. 1.
But last Wednesday, the Texas Department of Insurance rejected the request, saying in a release that the request "flies in the face of sound data that demonstrates future rates should be dropping" in light of the new cap.
"I am very troubled that any carrier of medical malpractice insurance would consider raising rates for Texas physicians," Insurance Commissioner Jose Montemayor says in the release.
Montemayor notes that state's largest malpractice underwriter, Texas Medical Liability Trust, is planning to decrease premiums by 12% next year.
But according to media reports, TMLT has increased its rates 128% since 1999, compared with a 3% increase for the JUA, which has seen a large increase in insured doctors.
The not-for-profit JUA was created by the state Legislature in 1975 to provide coverage for doctors who have been denied coverage at other carriers or who can't find more affordable terms.