A Break For State’s Doctors

By DIANE LEVICK | Courant Staff Writer

Many Connecticut doctors will pay lower premiums for malpractice insurance because of actions taken by two insurers, and another company plans to enter the market here, heating up competition.

The premium decreases will range from a few percentage points to more than 20 percent, providing at least a little relief to physicians who shouldered steep rate increases until rates began to stabilize about three years ago.

Connecticut Medical Insurance Co. announced Wednesday it won’t change base rates for 2008 but will increase credits granted to doctors who have been claim-free at least five years, which effectively lowers their premiums.

The company insures 2,400 doctors and other health professionals and is owned by its members. All but about 200 of them are in Connecticut.

Meanwhile, The Medical Protective Co.’s proposed average 24 percent rate decrease for Connecticut, previously reported, was approved by state regulators and took effect Aug. 1. The company, which raised rates about 90 percent in 2004, had insured only about 100 Connecticut physicians in 2005. Updated data couldn’t be obtained Wednesday.

Boston-based ProMutual Group, which would typically file rate changes to take effect Dec. 1, isn’t planning any in Connecticut this year and didn’t seek any for last Dec. 1. Regulators rejected a proposed 12 percent increase in 2005.

ProMutual insured 2,955 health professionals, including 2,751 physicians in Connecticut, as of June 30. In addition, the company also insured 21 medical institutions here.

In another good sign for the market, the Professional Liability Insurance Company of America, based in St. Louis, Mo., wants to enter Connecticut. It currently sells malpractice insurance in Missouri, Illinois, and Texas.

The Connecticut Insurance Department says it approved PLICA’s proposed rates and is still reviewing its policy forms and rules.

Connecticut Medical’s news Wednesday about larger premium credits drew praise, but also raised eyebrows about whether the company and others should go further. The range of the premium credits is currently 7.5 percent to 25 percent, but will be 10 percent to 30 percent next year.

Raising the credits is a “very valuable part of the dynamic for those physicians insured by CMIC,” said Amy E. Cole, spokeswoman for the Fairfield County Medical Association. But she noted, “as gratifying as it is” that companies aren’t raising rates, “we feel a rollback of rates across the board is what will prove the system is becoming more tolerable.”

Neil Ferstand, executive director of the Connecticut Trial Lawyers Association, said Connecticut Medical’s announcement is “certainly good news for the medical community.” But, he added: “We just hoped that it would’ve been a decrease” in base rates after years of profitability.

Connecticut Medical’s net profit rose from $12.5 million in 2005 to $22.9 million last year; some of the increase was from tax credits and operating losses carried forward from past years.

Connecticut Medical’s rate decisions are based on keeping the company financially strong, said Denise Funk, its chief executive. Financial rating agency A.M. Best Co. gives the company a B++, which is “very good” but is only the fifth highest possible rating.

Connecticut Medical awards premium credits to people who have been insured with the company for at least five years and have had no claims for at least five years.Funk said about 90 percent of the policyholders who have been with the company for five years or more qualify for premium credits.

The credits are granted on a sliding scale and depend, at least in part, on how many years a doctor has been claim-free. The more years claim-free, the larger the credit.

With the higher range of potential credits next year, a doctor who has had no claims for seven to 10 years would see the credit increase from the current 15 percent to 30 percent next year, Funk said.

A physician with five to seven claim-free years could qualify for a 10 percent credit next year, up from this year’s 7.5 percent, Funk said.

The breaks some doctors will be getting from their insurers won’t stop efforts toward more reforms of the legal system to try to restrain malpractice claim costs, such as caps on pain and suffering damages.

“The rates are still high and there still needs to be something done about the liability crisis in the state,” said Matthew C. Katz, executive director of the Connecticut State Medical Society.

Connecticut Medical still supports a cap of $500,000 on non-economic (pain and suffering) damages against a physician and $1 million against hospitals to try to ease “the serious debilitating high premiums our doctors are paying in the state,” Funk said.

Funk said her company has found that the non-economic damages it pays on claims are three times as large on average as the damages paid for monetary loss.

Ferstand said trial lawyers will continue to oppose caps on damages, which he called a way for insurers to “continue to make enormous profits.”
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