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EDITORIAL: Renew No-Fault: Demise of PIP Will Create Health Care Crisis

Jul 7, 2007

By The Bradenton Herald, Fla.

Jul. 8--We dislike special sessions of the Legislature as much as anyone. They're expensive extensions of legislative deliberations that should have been accomplished in the annual two-month regular session.

Yet it's imperative that Gov. Charlie Crist call a special session before Oct. 1 to avoid a crisis in the auto insurance industry. That's when Florida's Personal Injury Protection (PIP) law will expire unless the Legislature meets and votes to renew it for one more year. The extension will give legislators more time to debate reforms that respond to concerns about PIP's role as a magnet for ambulance-chasing profiteers.

This would be the third special session this year, adding to state government's overhead in a time of austerity. Yet would anyone argue that the January session on property insurance wasn't necessary? Or the June session on property-tax reform? Not likely.

So it is with a session to renew PIP. Also known as no-fault insurance, PIP is a requirement for every auto owner to have at least $10,000 worth of insurance to pay for medical care required as a result of auto accidents, regardless of which driver was at fault. This assures that accident victims will have money to pay for immediate medical care without a costly, drawn-out legal fight to establish liability for the crash. It assures that hospitals and doctors will be paid for such services through the insurance policies that auto owners are required to have -- at least up to the $10,000 ceiling.

Insurance industry got its way

But the insurance industry has long opposed PIP and used its considerable lobbying clout in this year's regular session to block proposed reforms in the Senate. Insurers object because they don't like having to automatically pay out on their policies if a client is hurt in a crash. Apparently they would rather litigate over claims, hoping eventually to wear down the client through a long and costly court fight.

Oh, they won't admit that publicly. Instead they point to the ambulance-chasing industry that has sprung up, chiefly in South Florida, built around fraudulent medical claims under PIP's coverage. Rings involving shady lawyers, doctors, chiropractors and other medical service providers milk the system with phony back and neck injury claims, sometimes even to the point of staging phony crashes to generate "injuries" for their treatment mills.

Of course such abuse is a big problem, and the attorney general's consumer fraud division should step up prosecution of those rings.

Scrapping PIP just to block their gravy train reminds one of the Pentagon's Vietnam War strategy in which the Army was told "to destroy the village to save it." If PIP goes away, hospitals and clinics will be stuck with millions of additional dollars of costs -- estimates range as high as $350 million -- from crash-injury medical care for which they will not be reimbursed. Florida hospitals already are facing a financial crisis created by the burden of indigent care for which they are not adequately compensated. This will only add to the crisis, because 40 percent of all motor vehicle accident victims now have no health care coverage. Indeed, the Florida Hospital Association warns it may force hospitals to close trauma centers.

Some naive assumptions

The loss of PIP is not in the interest of consumers, despite what the insurance industry says. It claims that the average two-car family would save $360 on its auto insurance premium without PIP. Anyone who believes initial rate reductions would survive subsequent rate increase requests cannot have lived in Florida very long.

Just as naive is the insurance industry's contention that making personal injury coverage optional is consumer-friendly. Who believes that, if drivers are not required to have personal injury coverage, a large percentage will opt not to purchase it? That means even more uninsured patients to be absorbed by the medical industry and paying patients fortunate enough to have health care coverage.

And what of those? We know that private health care coverage is becoming more expensive each year, with covered services dwindling and deductibles rising. That means if hurt in a car crash you could pay far more out of pocket for medical treatment than the supposed savings gained from canceling PIP. You would be expected to pay all of those medical bills up front, while it could take months to be reimbursed by your insurance company for treatment that is covered.

Florida needs to renew PIP. It is just as important as, if not more than, property insurance and property taxes. Call a special session soon, Gov. Crist.

Talk back

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