As the US healthcare insurance market tightens, both brokers and healthcare providers face rising costs, fewer choices, and more complicated coverage plans. Brett Pollak, senior managing director at Foundation Risk Partners, says the situation now is a lot like the early 2000s, bringing big challenges for medical professionals.
Pollak explains that the market has grown much smaller, with fewer insurers offering policies. Some risk retention groups and captive insurers have left, which has made prices go up. Where you are also matters—Florida benefits from laws that limit huge court awards, which helps keep prices steady. But in places like the Northeast, big verdicts for plaintiffs are common, pushing prices even higher.
There’s also confusion around malpractice insurance types. Pollak points out two main kinds: claims-made and occurrence policies. Occurrence policies cost more upfront, while claims-made plans start cheaper but get pricier over time. A big issue comes when a claims-made policy ends—doctors need to buy extra "tail" coverage unless they retire for good, and this can be expensive.
To handle this, many healthcare organizations are grouping smaller practices under one management system. This helps standardize insurance policies, often using claims-made types, and can save money if done right. They also use strategies to manage the costs of tail coverage, which appeals to those watching their budgets.
Pollak has also seen that insurance brokerage firms are consolidating. Just a handful of big brokerages now handle most large medical accounts. Smaller brokerages play a limited role, even when the market is less tight. This concentration makes expert brokers even more important for healthcare providers looking for the best coverage.
With prices climbing and options shrinking, Pollak encourages providers to rethink how they design their insurance plans. Combining practices, choosing the right policies, and planning for tail coverage can lead to better protection without breaking the bank. He stresses the need for careful planning and expert advice to find the best solutions in today’s market.