Before the passage of the Medical Injury Compensation Reform Act of 1975 (MICRA), California faced a medical malpractice insurance crisis. The crisis arose when juries began awarding extreme financial compensation causing medical malpractice premiums to skyrocket by more than 300%. Most notably MICRA placed a $250,000 cap on non-economic damages (i.e. pain and suffering) only and did not cap damages for lost wages, medical bills, among other â€œmeasurable'sâ€; MICRA also places a cap on the plaintiff attorney fees on a sliding scale basis.
While the constitutionality of MICRA has been challenged numerous times (mostly in the late-1970s and 1980s), revisions to the law have been proposed to the California electorate twice since 1975, once in 1999 and again in 2014. Both proposed revisions sought to adjust the $250,000 non-economic damage cap to better reflect either the current cost of living and/or an adjustment to reflect the inflation that has occurred since its passage. In 1999, a California bill sought to increase the $250,000 cap to reflect the cost of living. In order to maintain the current cap in 1975 dollars, the cap would increase to $753,000 by the year 2000 according to the 1999 bill. However, this bill was not passed and the current cap on non-economic damages remained at $250,000.
The 2014 proposition was deemed â€œCalifornia Proposition 46, the Medical Malpractice Lawsuits Cap and Drug Testing of Doctors Initiativeâ€; Proposition 46 made it onto the November 2014 California ballot and its purpose was the following
- To peg the non-economic damage cap to inflation which would effectively increase the cap from $250,000 to approximately $1.1MM
- To require drug & alcohol testing of physicians and mandate reporting positive results to the California Medical Board
- To require the California Medical Board to suspend the license of any physician with positive alcohol and/or drug test results
- To require all healthcare providers to report another provider suspected of being under the influence of drugs or alcohol or suspected of medical negligence
- To require all providers to consult the California prescription drug database prior to issuing prescriptions for controlled substances
Proposition 46 was defeated with 67% of voters against the legislation and 33% voting in support. If Proposition 46 passed, it would have been the first law in the nation requiring random drug and alcohol testing of physicians.
Since MICRA was established 1975, California has become one of the most stable medical malpractice markets in the country. MICRA has served as the national model for state and federal liability reform efforts.
Medical Malpractice Insurance Summary for California
Claims-made policies are the most common policy type in California and have a maximum maturation length of 5-6 years. Claims-made coverage provides coverage for claims that arise while the policy is in effect if the insured had coverage at the time of the incident. The typical limits of liability in this state are $1,000,000 per occurrence with a $3,000,000 aggregate limit. Most hospitals require their doctors to carry these same limits of liability.
Many factors are taken into consideration when determining which carrier to choose. Such factors include, AM Best rating, the year the company was founded, coverage trigger, and free tail provisions. There are three types of medical malpractice insurance carriers in the state; they include: Stated Admitted Carriers, Surplus Lines Carriers and Risk Retention Groups. Over the past few years, fewer claims have been filed allowing some carriers to pay dividends and offer rate reductions to their policyholders.
California's Top Medical Malpractice Insurance Companies:
- The Doctors Company
- Norcal Mutual Insurance Company
- Medical Protective Company
- The Cooperative of American Physicians - Mutual Protection Trust (CAP-MPT)
Medical Malpractice Insurance Rates By Specialty (Top 15)
Rates depend greatly on specialty. Physicians offering high-risk care, such as surgeons, have higher rates than doctors in lower-risk areas. Prices will vary, though, based on your claim history and location in addition to your specialty. Always talk to an insurance expert to get a more specific quote for your malpractice insurance.
Below are undiscounted state filed rate data averages across all territories for
$1m / $3m limits
* Please note that the above rates are state filed rates. It is not
uncommon for Gallagher Healthcare clients to receive up to 50% or more in discounts
from state filed rates. Please Request a Quote to receive a custom premium indication.
|Specialty||Average Rate||Min Rate||Max Rate||Count
|Internal Medicine No Surgery||$8,286||$3,344||$16,876||12897
|Family Practice No Surgery||$7,881||$3,029||$17,893||11815
|Pediatrics No Surgery||$8,338||$4,407||$16,876||7026
|Obstetrics and Gynecology Major Surgery||$42,670||$19,390||$84,380||4070
|Radiology - Diagnostic||$10,934||$5,729||$21,095||3766
|Ophthalmology No Surgery||$6,568||$2,203||$13,501||2534
|Orthopedic Surgery No Spine||$25,105||$10,995||$56,363||2244
|Cardiovascular Disease Minor Surgery||$12,922||$8,040||$25,587||2077
|General Practice No Surgery||$7,881||$3,029||$17,893||1723
|Neurology No Surgery||$11,552||$6,170||$25,050||1535
Rate Range by Specialty
This chart compares the range of possible state filed medical malpractice premium rates by admitted markets and a few Gallagher Select markets broken out by the top 15 specialties in California.
USA Ranking Map
The map below provides a visual display of the nation and compares what a typical primary care physician might pay compared to each individual state and county. This research is based on the average rate for a single specialty, the most common limits in that state, and the mature claims made premium. The darker the blue, the higher the average premium, see how California compares to other states.