By: Jenn Negley, Vice President, Risk Strategies Company
Most in healthcare and medical malpractice have been keeping an eye on the GFA legislation for several years now knowing the negative effect it would have on an already stressed sector. While all involved are assumed to have good intentions, it appears they have a blind spot when it comes to the GFA’s impact on the State’s medical malpractice insurance market and in turn healthcare. This failure to address the concerns continues with GFA 3.0 despite being clearly indicated in past vetoes.
While GFA 3.0 did eliminate “disorders” as a category of damages it maintained “grief or anguish.” The GFA 3.0 also still looks to broaden the current statute of limitations from two years to three years. GFA 3.0 originally scaled back the “eligible” family members that could recover damages to the current law’s definition only to propose assembly bill AB 9232B/S8485B that would result in the expansion of eligible family members once again. What is most troubling to industry experts is the current GFA calls for an immediate implementation effective for all wrongful death that occurs on or after January 1, 2021.
As I mentioned last year when discussing the GFA 2.0, malpractice carriers are already struggling with upticks in claim frequency and a dramatic rise in payout amounts. A recent study released in April 2024 by the New York Civil Justice Institute titled Consumers in Crisis How New York’s Hostile Liability Environment Inflates Insurance Cost and Fleeces Empire State Families (www.nycji.org/research) details the issues already contributing to a difficult insurance market. If signed as is, it will add to the pressures already in play. With no caps in place, more time to file, and the broadening of who can file the deck will be stacked against malpractice carriers. In addition, adding the change retroactively eliminates a carrier’s ability to make the necessary financial adjustments potentially forcing some out of the market. To maintain solvency, carriers as well as the insurance department will keep a close eye on these trends which might indicate the need for increased rates. Milliman, an independent actuary determined with the new inclusion of grief and aguish only, rates would need to be increased by 40%. As this has dragged out for several years, I have had the opportunity to speak to many of New York’s carriers’ upper management and everyone agrees such an increase would be a disaster for New York’s healthcare market, but all also note their fear that the New York State Department of Financial Services will see it as a necessity for admitted carriers to remains solvent.
To be clear, none of the admitted carriers are looking to take these steps but cannot ignore the independent statistical analysis of the GFA’s impact on their ability to defend New York’s healthcare providers and facilities. With little change, the “New” GFA the Governor’s veto message from last year still rings true. “Legitimate concerns have been raised that the bill would likely lead to increased insurance premiums for the vast majority of consumers, as well as risk the financial well-being of our healthcare facilities – most notably, for public hospitals that serve disadvantaged communities.” For the health safety of all New Yorkers GFA 3.0 in its current form needs to be vetoed once again.
Reach out to Governor Hochul now.
Facebook: @Governor Kathy Hochul
Twitter: @govkathyhochul
Instagram: @govkathyhochul
For more information, please contact Jenn Negley, Vice President, Risk Strategies Company at 267-251-2233 or JNegley@Risk Strategies.com.
The views expressed in this article on pending legislation are solely those of the author and do not necessarily reflect the official stance, policies, or opinions of Risk Strategies. This article is intended for informational purposes only and should not be construed as professional advice.