Legislation aimed at stabilizing Ohio’s turbulent medical malpractice market passed the Ohio House of Representatives unanimously yesterday and is now headed to the Senate.
House Bill 282, sponsored by Rep. Larry Flowers (R-Canal Winchester), would create a $12- million fund for medical malpractice initiatives, and would authorize the insurance director to establish a new medical-liability underwriting association (MLUA) if the market worsens.
“In terms of accomplishments in my first year I certainly think this is a top accomplishment,” Ohio Insurance Director Ann Womer Benjamin told Insurance Journal. “As you know we’ve been dealing with the medical malpractice situation in Ohio and it’s been our top priority over the last year. There have been growing concerns about the availability of such coverage, not just affordability.”
The American Medical Association Ohio’s medical liability system to be one of 18 in crisis across the country. Benjamin agreed with the description.
Benjamin testified twice in support of the bill and said the issue that had to be resolved in order to secure passage was to negotiate an agreement with insurers that they would not be the target of any assessment to fund the MLUA. Instead, it would be funded by the $12 million as seed capital and premiums paid by the insured doctors.
Benjamin claimed the Ohio situation is improving.
“We do have five major companies offering coverage to about 72 percent of the market,” she said. “Thirty or so companies are writing a million dollars or more, so we do have carriers offering the coverage here in Ohio. The discussions I’ve had with some of the insurance company leadership seems to indicate that the rates in Ohio are getting where they need to be to attract new companies into the market and to meet the future claims experience they expect. Rates still are going up.”
The legislation, as amended, would provide for the transfer of $12 million from the Ohio Joint Underwriting Association (JUA), a 1975 state-created medical malpractice insurance company, which is being terminated by law.
The money could be used to fund a new medical liability company or other initiatives decided by the General Assembly. The Ohio Medical Malpractice Commission, established under SB 281, also is expected to recommend curative measures to the legislature, some of which may require funding.
The legislation would also give the director authority to create an MLUA if the current market for medical malpractice insurance would further deteriorate. The MLUA would write primary insurance coverage for doctors unable to find medical liability coverage. The operational aspects of the MLUA would be similar to the JUA.
Editor’s note: For the complete interview with Director Benjamin on issues ranging from medical liability to commercial auto coverage, see the Jan. 26 issue of Insurance Journal Midwest, which covers Ohio, Michigan, Indiana, Wisconsin, Illinois, Missouri, Minnesota, Iowa, North Dakota, South Dakota, Nebraska and Kansas. For more information on receiving the magazine, visit www.insurancejournal.com/subscribe or e-mail firstname.lastname@example.org.
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