Medical Liability Insurance Premiums Rise for Seventh Consecutive Year, AMA Reports

Nationwide Premium Increases Hit Healthcare Providers

Medical liability insurance premiums have risen for seven consecutive years through 2025, marking the longest sustained upward trend since the early 2000s, according to new research from the American Medical Association. The analysis found that 39.9 percent of reported premiums increased year-over-year in 2025, with six percent experiencing increases of six percent or more.

This sustained growth began after 2018, when only 13.7 percent of premiums increased annually. By 2024, premium increases peaked at 49.8 percent before moderating slightly to the current level. While the 2025 figure represents a slight decline from the previous year’s peak, it remains the second-highest rate of increase since 2005.

Geographic Disparities Create Operational Challenges

Healthcare organizations face varying financial pressures depending on their location. Thirty-six states experienced at least one premium increase in 2025, with eighteen states reporting that at least half of their premiums rose. Eleven states encountered particularly steep increases of ten percent or more, including Rhode Island at 25 percent, Utah at 25 percent, and South Carolina at 20 percent.

Florida healthcare providers experienced premium increases of 19 percent, while organizations in Georgia faced 12.5 percent rises. Illinois, Pennsylvania, Kentucky, Florida, and New York have been especially affected, with large premium increases occurring in both 2024 and 2025.

Specialty-Based Premium Variations Impact Practice Economics

The financial burden varies significantly across medical specialties, creating distinct cost structures for healthcare organizations. Surgical specialties and obstetrics-gynecology face substantially higher premiums than internal medicine practices. In Miami-Dade County, Florida, internal medicine physicians pay annual premiums of approximately $59,736, while obstetricians-gynecologists and general surgeons face premiums of $243,988.

Similar disparities exist across other markets. Connecticut shows a range from $22,467 for internal medicine to $159,537 for obstetrics-gynecology. These variations reflect the higher liability risk associated with surgical specialties and complex procedures.

State Policy Frameworks Influence Cost Structures

California presents a notable exception to national trends, with significantly lower premiums attributed to state legislation capping noneconomic damages under the Medical Injury Compensation Reform Act. Los Angeles physicians in internal medicine pay just $8,274 annually, compared with $41,775 for general surgery and $49,804 for obstetrics-gynecology.

The state’s premium structure remained relatively stable between 2024 and 2025, demonstrating how tort reform measures can influence insurance costs. However, California experienced an 11.6 percent average increase in 2023 following an adjustment to damage caps, before stabilizing in subsequent years.

Financial Implications for Healthcare Organizations

Rising liability insurance costs create cascading effects throughout healthcare operations. Organizations must allocate increasing resources to risk management while potentially limiting services or adjusting care delivery models. The trend particularly affects smaller practices and rural healthcare providers who may lack economies of scale to absorb premium increases.

AMA President Bobby Mukkamala noted that ongoing liability risk increases practice expenses and reinforces defensive medical practices, ultimately driving up healthcare costs for patients and families. Most medical liability cases never find fault with physicians, with the majority being dropped or dismissed before trial.

Healthcare organizations navigating rising medical liability costs can benefit from specialized guidance. Contact James Moore’s healthcare practice team to discuss how these developments may impact your organization.

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