HAP Letter to Insurance Department on 2016 Mcare Limits
March 30, 2015
Actuarial Supervisor, Property & Casualty Bureau
Pennsylvania Insurance Department
1311 Strawberry Square
Harrisburg, PA 17120
Dear Mr. McKenney:
Per your January 28 request for public comment pursuant to Section 711(d)(3) of Act 13 of 2002, HAP's assessment of the medical liability insurance market is that there is sufficient capacity to increase coverage from the current $500,000/$500,000 single and $1,500,000 aggregate limits to $750,000/$250,000 and $2,250,000 aggregate limits effective January 1, 2016.
In addition to ample commercial market capacity to handle this increase, nine of every ten hospitals utilize alternative insurance arrangements, including self-insurance and risk retention groups. These hospital alternative insurance arrangements indicate there is capacity to increase coverage limits.
This, coupled with the fact that many hospitals have added physicians to their medical liability coverage programs, means the commonwealth should increase the limits.
A key indicator of the medical professional liability market capacity is demand, or lack of demand, for basic insurance coverage from the Pennsylvania Medical Professional Liability Joint Underwriting Association (JUA).
The JUA provides coverage for health care providers in Pennsylvania who cannot conveniently secure required basic insurance coverage from the commercial market. The attached chart shows that the JUA in-force policy count has dropped from 1,995 in 2003 to only 306 policies last year (2014).
Again, HAP supports the current phase-out provisions of Act 13. We also greatly appreciate the opportunity to work with the administration to be responsive to market conditions and provide for the measured transition in basic coverage requirements in the commonwealth.
President and Chief Executive Officer