Medical Malpractice Insurance Options

Pursuant to a congressional request, GAO estimated the costs and savings that federally funded community and migrant health centers could realize by obtaining medical malpractice insurance through either a risk-purchasing group or a risk-retention group compared to their prior insurance coverage. GAO noted that: (1) community health centers could save an estimated $57 million in medical malpractice insurance premiums over a 5-year period if all centers were insured through either a risk-purchasing or a risk-retention group rather than through individual commercial insurers; (2) an insurer would have to be willing to assume the risk before centers could obtain insurance through a risk-purchasing group; (3) if the centers formed a risk-retention group, they would have to provide an estimated $17 million in capital to establish the group's insurance company; and (4) these insurance options would provide limited or no protection to the centers against insurer insolvency.