The Nebraska Excess Liability Fund provides excess coverage for medical malpractice claims against qualified health care providers in Nebraska. The provider is responsible for the first $500,000 in coverage, and the Excess Fund provides coverage from $500,000 up to the maximum amount recoverable of $1,750,000. The Excess Fund is paid for by a surcharge levied on qualified health care providers. The surcharge is expressed as a percentage of the premium charged for the provider’s underlying $500,000 in coverage.
Last month, the Director of Insurance for the State of Nebraska, after a public hearing, set the surcharge for 2013 at 18%. This continues a trend of decreasing surcharges that began in 2005. Between 2003 and 2005, the surcharge was the statutory maximum of 50%. Starting on January 1, 2006, this decreased to 45% and the surcharge has steadily decreased ever since. The current surcharge of 18% is the lowest it’s been since 2002.
The decrease in surcharge is likely due to a number of factors: an increase in the amount of required underlying insurance from $200,000 to $500,000 in 2005, an increase in the Fund’s operating reserve secondary to decreased losses, and improved investment activity as the bond market recovers from its 2008 losses. Hopefully, this is a trend that continues.