Medical Malpractice Insurance in Illinois & Tort Reform
Illinois has long been considered a medical liability crisis state. Tort reform advocates argue this dubious distinction can be attributed to the state’s court system. Cook, Madison and St. Clair Counties, specifically, are widely acknowledged as having very plaintiff-friendly courts, and healthcare professionals who practice in those regions pay medical malpractice insurance rates that rank amongst the highest in the nation. And following a recent decision by the Illinois Supreme Court, those rates look to increase in the near future.
On Feb. 4, 2010, the Illinois Supreme Court dealt another blow to its physician and patient populations—as well as tort reform advocates nationwide—when it struck down the state’s almost five-year-old medical malpractice insurance reforms. The now invalid Public Act 94-677 legislation was passed amid statewide escalating liability costs for medical providers and capped pain-and-suffering as well as other non-economic damages at $500,000 per case for doctors and $1 million for hospitals
The much anticipated ruling marked the third time that the state’s highest court has invalidated limits on medical malpractice awards, ruling against similar laws in 1976 and 1997. Tort reform advocates and the Illinois State Medical Society argue that the court’s decision invites an increase in medical claims, along with higher insurance premiums for the state’s healthcare community. In fact, tort reform advocates point to a recent study that was conducted in the wake of the high court’s decision that calculated the potential impact to be an 23 percent jump in physician medical malpractice insurance premiums over the course of the next few years. Over time, and depending on the volume of claims and award amounts, this number could grow much higher.
The Illinois Supreme Court ruling originates from a 2006 malpractice lawsuit, LeBron v. Gottlieb, where plaintiffs alleged obstetric malpractice led to injuries that include “severe brain injury, cerebral palsy, cognitive mental impairment, inability to be fed normally and develop normal neurological function.”
THE COURT’S OPINION
In its ruling that Public Act 94-677 was unconstitutional, the Illinois Supreme Court cited the state constitution’s separation of powers clause as its reasoning, which upheld the 2007 ruling by a Cook County Circuit Court judge, who determined the damages cap violated the right of juries to determine fair damages.
Citing the precedent of Best v. Taylor Machine Works, 179 Ill. 2d 367 (1997), the court ruled that the statutory caps violate the separation of powers clause of the Illinois Constitution because “the legislature is prohibited from enacting laws that unduly infringe upon the inherent power of judges” and “disregards the jury’s careful deliberative process in determining damages that will fairly compensate injured plaintiffs who have proven their causes of action.”
WHAT THE DECISION MEANS FOR ILLINOIS
In all likelihood, the state Supreme Court’s ruling in Lebron v. Gottlieb marks the end of flat, or waning, medical malpractice insurance rates in Illinois. ISMIE Mutual Insurance Company, the state’s largest medical liability insurer, had lowered or maintained its premiums since the 2005 signing of Public Act 94-677 into law.
The American Medical Association announced its worry that Illinois’ patients and physicians would now revisit the crisis that occurred in the state after the court overruled a previous cap on non-economic damages in 1997, where severe problems with patient access to care emerged as the excesses of the state’s legal system forced Illinois physicians to limit services, retire early or move to other states where medical malpractice insurance premiums were more stable.
The actuarial consulting firm Milliman has estimated that the court’s ruling will increase medical liability insurance costs in Illinois by approximately 23 percent. The company also estimated an increase of 10 percent in ALAE costs, for an average increase in loss and ALAE of 18 percent.
The impact on medical malpractice insurance rates in Illinois, however, is not as clear because medical malpractice insurance companies had been skeptical from the beginning that the 2005 legal reforms would hold (Illinois does have a judicial reputation after all). As such, Milliman does not expect the full impact on loss costs to be felt on actual rates.
Because the 2010 Lebron decision has pushed Illinois’ medical malpractice insurance rates back into questionable territory, it is more important than ever to employ the help of an experienced broker with access to all the major carriers when shopping for medical malpractice insurance in Illinois. A knowledgeable medical malpractice insurance broker in Illinois can shop your coverage to ensure you get the best policy at the best price.
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