The US healthcare insurance market is feeling the squeeze again as prices go up and options shrink. Brett Pollak, senior managing director at Foundation Risk Partners, says the current situation looks a lot like what happened in the early 2000s. Providers are facing higher costs and fewer choices, making it tougher for them to find good coverage.
According to Pollak, the market is tight with fewer insurance providers offering malpractice coverage. Some risk retention groups and captive insurers that once competed in the space have now left, driving prices even higher. Where you live also matters. In Florida, tort reforms have kept large jury awards in check, helping insurers keep prices reasonable. But in places like the Northeast, big plaintiff verdicts are common, which forces insurers to raise prices to cover the risks.
Malpractice insurance itself is tricky. There are two main types: occurrence policies and claims-made policies. Occurrence policies cost more upfront, but claims-made policies start cheaper and get more expensive over time. At the end of a claims-made policy, doctors need to buy "tail" coverage unless they retire for good, which can be costly. To handle this, some large healthcare organizations group smaller practices together and standardize their coverage under management services organizations. This can save money and make managing the insurance easier.
The brokerage side is changing too. A handful of big, specialized brokerages dominate the field. These firms often buy up smaller agencies, keeping the market concentrated. Smaller brokerages tend to have a hard time competing in this environment.
With rising costs and fewer options, designing insurance programs carefully is more important than ever. Pollak suggests that combining multiple practices, choosing the right policy types, and managing tail coverage properly can lead to big savings without losing protection. Providers need to plan ahead and get expert help to make the best choices in this tough market.