The management liability insurance market will continue to evolve in 2025 for all healthcare organizations, from providers to payors. Insurers are monitoring how macroeconomic factors and potential changes to federal regulations will impact the operation and performance of their insureds, and the management liability exposures that may intensify as a result.

After years of softness, the insurance market for healthcare organizations is stabilizing in certain pockets due to legacy losses and uncertainty about future exposures. Collaboration and proactive risk management will be paramount for insureds, insurers, and other stakeholders.

Exposures to monitor in 2025:

Evolving federal regulations. Changes to the U.S. healthcare system are already happening. In January, several executive orders reversed initiatives around reviewing Medicare and Medicaid pricing models, strengthening the Affordable Care Act, and managing the deployment of artificial intelligence tools in healthcare. Underwriters will want to understand how healthcare organizations are positioning themselves to comply with federal regulatory changes and withstand any changes to operations and revenue streams that could result.

Pharmaceutical developments. The American pharmaceutical industry is under scrutiny after continued investigation of the three largest PBMs’ pricing models by the Federal Trade Commission. Insurers will watch for any regulatory changes that result from these investigations. The widespread adoption of GLP-1s as covered prescriptions presents another exposure to payors. Expect insurers to scrutinize how health plans are planning for use of these medications by members to impact their profitability, as utilization expectations are still largely unknown.

Antitrust remains a top exposure in healthcare management liability insurance – from industry consolidation via M&A activity leading to more large systems increasing their market power, to the recently-filed MultiPlan Health Insurance Provider Litigation, which names multiple payors as co-defendants in an alleged price-fixing conspiracy.

Insurance market dynamics to consider for an upcoming renewal:

Capacity

• Some insurers have limited their appetite for large risks ($10B in revenue or larger) and will no longer consider primary placements for healthcare risks. They will look to move into an excess position if currently the primary insurer and manage their capacity down to $5M.
• Though the primary market remains limited for healthcare risks, especially for systems over $1B in revenue, the excess market continues to be competitive with ample capacity.
• Newer insurer entrants struggle to gain market share.

Pricing

• Expect primary insurers to seek premium increases commensurate with significant changes in exposure. Leading healthcare insurers are seeking rate increases on large risks across their books, driven by legacy loss experiences.
• The excess market remains competitive but anticipate excess pricing to stabilize.

Coverage

• Coverage in 2025 will likely reflect the ongoing evolution in risk profiles.
• Insurers will continue to adapt their policies to address emerging risks such as antitrust, False Claims Act and other regulatory matters, AI, environmental, social and governance (ESG) and anti-ESG-related exposures.

To manage exposure and prepare an adequate insurance program, be sure to consider how these evolving risks impact your business and the insurance market. Aon also has exclusive access to Cosantoir, a standalone product designed for health systems, tailored to respond to the nuances of enforcement actions arising from alleged Stark, False Claims Act and Anti-Kickback Statute violations, providing coverage for defense costs and settlements.

If you have any questions about your coverage or are interested in obtaining coverage, please contact your Aon broker.