3D renderings of US states, Georgia and Illinois with judge's gavels.

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Lifting Noneconomic Damage Caps Is Linked to Higher MPL Insurance Rates

February 16, 2026

With Noneconomic Damage Caps Lifted, Medical Liability Rates Jump — What MPL Markets Should Know

This analysis is for retail insurance agents and healthcare risk advisors placing medical professional liability (MPL) coverage for physician groups, specialists, and hospital-based providers.

New research published in Health Economics and highlighted in a recent American Medical Association article shows that when state courts overturn or repeal legislative caps on noneconomic damages in medical malpractice cases, MPL insurance rates can rise sharply.

For agents and brokers navigating a challenging liability environment, understanding how state-level tort reform shifts — particularly the removal of noneconomic damage limits — can affect pricing, capacity, and underwriting risk is increasingly important.

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Direct Answer: What the New Research Shows

A first-of-its-kind study examining the repeal of noneconomic damage caps in states such as Illinois and Georgia found persistent increases in MPL insurance premiums after the courts struck down the caps.

In Georgia, medical liability premiums for obstetrician-gynecologists increased by more than 23 %, while general surgeons saw almost a 20 % rise. In Illinois, full repeal of caps correlated with a 25 % increase for general surgeons and over 21 % for ob-gyns. Internists also experienced notable rate hikes.

These findings suggest that noneconomic damage limits play a material role in moderating MPL insurance cost volatility and that removing them may accelerate hardening conditions in local markets.

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State Tort Reform and MPL Premium Dynamics

Noneconomic damages are amounts awarded for subjective losses such as pain and suffering, mental anguish, and loss of enjoyment of life. In many states, legislative caps historically limited these awards to constrain jury awards, reduce claimant uncertainty, and potentially ease the MPL insurance burden on physicians.

The new data shows that voluntarily repealing or invalidating these caps doesn’t just eliminate a legislative constraint — it often triggers premium shifts that exceed the reductions seen when caps were originally implemented.

This dynamic has important implications:

Underwriting Risk: Carriers may view states without damage limits as higher severity exposures, tightening terms.
Pricing Pressure: Persistent premium increases may signal market hardening in regions considering tort reform changes.
Capacity Considerations: Some insurers may constrain appetite where jury awards are unconstrained by statutory caps.

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What This Means for Healthcare Providers

For physicians and healthcare facilities operating in or near states where noneconomic damage caps are under legal or legislative scrutiny, these research findings signal potential downstream effects on:

Professional liability pricing
Policy terms and sublimits
Carrier competitiveness
Physician practice economics

Agents placing coverage should stay informed about local tort reform activity. Even if caps remain technically in place, court challenges or ballot initiatives could alter the MPL landscape and influence carrier behavior.

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Why This Matters Now

This study arrives at a time when parts of the U.S. MPL market are showing signs of hardening, driven by rising claim severity and jury award volatility. Evidence that repealing key tort reform measures can materially increase premiums strengthens the case for brokers to:

Monitor state-by-state tort reform developments
Incorporate damage cap risk into underwriting narratives
Anticipate pricing shifts before they affect client renewals

Understanding how damage cap policy changes interact with MPL severity and premium trends is essential for agents advising clients and carriers planning for 2026 market conditions.