State officials look at offering medical malpractice insurance

JEFFERSON CITY, Mo. -- Missouri began looking Friday at whether the state should offer medical malpractice insurance to doctors unable to afford rapidly raising private insurance rates.

The Department of Insurance public hearing on the creation of a state malpractice insurance program came just two days after Democratic Gov. Bob Holden vetoed Republican-backed legislation that sought to address the problem by imposing new limits on malpractice lawsuits.

One option under consideration by the Insurance Department would create a state-sponsored joint underwriting association authorized by a 1976 law. The association would set insurance malpractice premiums and pool the resources of Missouri insurers to underwrite risk.

The state currently has similar quasi-governmental groups that provide automobile and fire insurance for those who can't get coverage from private insurers.

"It is an option of last resort," said Scott Lakin, director of the state Department of Insurance.

"But we have not prejudged anything and we need to listen to all sides on this issue."

A crisis state

Missouri has been declared a crisis state by the American Medical Association for the lack of available malpractice insurance.

Some leading insurers have stopped offering new policies while others have become insolvent, leading to lower capacity in the Missouri insurance market.

The vetoed bill would have put caps on damages for pain and suffering in medical malpractice cases. Holden objected primarily because the bill also imposed new restrictions on all personal injury lawsuits.

Mark Doerner, an attorney representing the department's property and casualty section, said Missouri's experience with the fire and auto funds show the state accounts make up only small portions of the total market for insurance.

If created, the malpractice insurance association would be authorized to issue individual doctors coverage of up to $1 million per incident and $3 million per policy year.

Some Missouri physicians have seen their malpractice insurance premiums triple and quadruple, even though they have not been named in a malpractice lawsuit.

Just nine companies write new medical malpractice insurance in Missouri, including two mutually liable cooperatives formed this year.

But some medical and insurance groups said the association would be merely a short-term solution that would do more harm than good or have little effect at all.

Don Carmody, an attorney with Missouri Physicians Mutual, which provides malpractice insurance, said setting up the association should be limited or else "it will certainly eliminate any competition in this state."

Steve Buie, a physician representing the Missouri Academy of Family Physicians, said he was not opposed to using an underwriting association but questioned its effectiveness.

"It's a short-term, stop-gap solution," said Buie, who said doctors are leaving Missouri because of the rising costs of malpractice insurance in the state. "I don't know if the association will be much help."

Lakin did not indicate when he might make a decision on how to deal with the medical malpractice issue.

------

On the Net

Missouri Department of Insurance: www.insurance.state.mo.us