Delay on budget session opens door on PIP reform
462 words
10 September 2007
Pensacola News Journal
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(c) Copyright 2007, Pensacola News Journal. All Rights Reserved.

EDITORIAL
With the Legislature delaying the special session on the budget that was scheduled for Sept. 18 - they can't agree beforehand on the $1 billion in cuts that are needed - it gives legislators a chance to add the question of automobile insurance.

On Oct. 1, the "sunset"- expiration - of mandated personal injury protection is scheduled to occur.
While there is no question that the system needs to be reformed, there is great question as to whether total elimination of PIP is the answer.
Delaying the sunset of PIP for a year to allow legislators to deal with reform would provide time for the state to re-examine the system and make a reasoned decision.

PIP appears to have succeeded in taming the problem of uninsured motorists in Florida. When PIP was introduced in 1979, uninsured motorists had become a serious problem for other drivers. PIP provides coverage for injured motorists without worrying about who is at fault, and ensures that there are no insurance concerns during the critical time after an accident.

In a state that also has a high number of people without health insurance, it helped keep uncovered care from being dumped on emergency rooms, hospitals and, in some cases, taxpayers.

But its critics say the lack of cost controls and oversight fed the creation of a massive insurance fraud industry. With a "pay on demand" structure, doctors, clinics and hospitals so inclined could game the system for excess, unneeded and sometimes outright fraudulent care.
Rightly or wrongly, the fact the insurance companies are the driving force behind elimination of PIP has raised concerns all over Florida.
The sad fact is that too many Floridians feel burned by their insurance companies over problems with hurricane coverage to trust companies' promises that eliminating PIP will lead to actual reductions in their automobile premiums.

The failure of policyholders to get any real relief from the special legislative session on insurance in January has left them feeling even more burned.

Insurance companies now say that the politicians over-promised in January, but Florida residents can be forgiven for the suspicion that the insurance companies were all too happy to let the politicians over-promise at the time, if that's what happened.

With taxpayers now coming to understand just how small their tax "cuts" are from the special session on property taxes, when the politicians also appeared to promise big cuts, legislators themselves are liable to soon find themselves side-by-side with the insurance companies in popularity polls.

Allowing a breather on PIP could help restore some luster to the Legislature's dimming star. Back to Top

IT IS TIME FOR FLORIDIANS TO SPEAK UP
By Annette Jackson
514 words
10 September 2007
South Florida Sun-Sentinel
Broward Metro
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Copyright 2007, South Florida Sun-Sentinel. All Rights Reserved.

The Personal Injury Protection (PIP) no-fault insurance law in Florida will sunset Oct. 1, 2007. The PIP law requires drivers to carry $10,000 in personal injury protection. In the event of an auto accident, with PIP, the injured party has automatic coverage for their injuries through their own insurance company no matter who caused the accident. This coverage is the only insurance required by the state of Florida to register a motor vehicle.

There are approximately 12 million registered vehicles in Florida. Of these, four million only carry the minimum required PIP coverage. That's one in three vehicles on the road.\ The insurance companies are lobbying the governor and the legislators to allow PIP to sunset. State Farm alone has spent $80,000 since January on lobbying efforts to allow PIP to sunset. So far they have been successful in opposing efforts to include the law in either the June special session or the one set for this month, which has now been postponed.

If the PIP law is not extended, Floridians injured in auto accidents will not have automatic coverage for medical treatment from their auto insurance policy. Insurance companies are telling us that we will save money on auto insurance. Not true. They want to see PIP eliminated because they don't collect enough premiums to cover their losses. Pure and simple it's a bottom line money making decision. Don't be fooled by insurance company claims of lower auto insurance costs.

If the PIP law is not extended, people injured in auto accidents will not have automatic coverage for medical treatment through their insurance policy. Auto insurance costs will go up because there will be four million uninsured autos on our roads. Responsible citizens who carry auto insurance will have to pay the costs associated with an accident caused by an uninsured motorist. Hospitalization insurance costs will increase because your health insurance will now have to pay for auto accidents. An estimated $278 million in medical bills now paid under PIP will shift to health insurance plans or directly to consumers. Lawsuits will increase because the no fault law will be gone.

Did you know that Florida is only one of three states in America that does not have mandatory minimum liability insurance requirements? Does anyone in our Legislature believe that the four million drivers who now carry only PIP will suddenly go out and buy liability insurance? Does anyone in our Legislature realize the implications of allowing four million uninsured autos on our roads? Does anyone in our Legislature really care about the people they serve? Allowing PIP to sunset without any replacement is totally against public policy.

According to a recent column in the South Florida Florida Sun-Sentinel, state Chief Financial Officer Alex Sink has asked legislative leaders in both parties to put PIP on the agenda for this month's special session. It's time all responsible citizens of Florida demanded the same.

Annette Jackson is a resident of Delray Beach. Back to Top

Honeymoon's over
Crist, Legislature need sense of urgency
Bradenton Herald, Sept. 9, 2007

After months of virtual silence, Gov. Charlie Crist has finally come out with a plan for dealing with Florida's budget crisis. Trouble is, it probably came too late to keep a special session of the Legislature on track for a Sept. 18 opening. And too much of the governor's cost savings come from shifting of service burdens to county and city governments.

Coming on the heels of a legislative session in which local government drew sharp criticism for excessive spending from the governor and House and Senate leaders, Crist's latest strategy for closing a $1.1 billion state budget gap seems especially hypocritical. Even as cities and counties have stepped up to the plate to cut spending in their 2007-08 budgets that take effect Oct. 1, Crist seeks to shift more of the burden of state cuts onto them, even as he exempts roughly two-thirds of the revenue consumers from making any spending cutbacks.

It remains to be seen whether Crist's belated leadership will bring the heads of the Senate and House any closer together on budget-cutting strategy in order to reschedule the special session that was postponed indefinitely Wednesday. The two leaders had been unable to agree on "a framework for action." In other words, they couldn't agree on a strategy for cutting state spending by $1.1 billion to compensate for the current economic slowdown produced by the deflation of the real estate bubble.

Why exempt two-thirds of budget?

The differences remain. Senate President Ken Pruitt wants an across-the-board 4 percent spending cut for all state agencies. House Speaker Marco Rubio more closely supports Crist's plan, which proposes that spending cuts be targeted, with education and human services spared from significant reductions.

We prefer the Senate's strategy. Concern for public schools and the needy is well and good, but sparing education and human services from the knife would exempt the two biggest revenue gobblers, as those two sectors account for two-thirds of state spending. That means the other one-third of state government would have to shoulder 100 percent of the cuts - along with local governments, Crist wants to stick with cost-shifting of juvenile justice and indigent health care services.

As Manatee County Administrator Ed Hunzeker has repeatedly said of exempting education or law enforcement from county budget cuts, that means that the lowest-priority school or social service program fares better than the highest-priority program of other agencies. That truly is not a practical way to approach the problem.

It also ensures that exempted agencies like public schools need make no effort to economize, trim payrolls and eliminate expendable programs. As any private businessperson knows, any manager ought to be able to reduce spending by 4 percent without doing major damage to the department's overall mission. Many companies facing the current business slowdown have been forced to trim far more than 4 percent and are still operating smoothly, albeit more leanly.

School district leaders and other public agencies need look no further than their own administrative offices for ideas on places to reduce costs.

And what about PIP?

Moreover, the delayed special session also virtually assures that Florida drivers will wind up with no personal injury protection (PIP) on the roads after Oct. 1. With PIP, or no-fault insurance, expiring Sept. 30, many had hoped that the budget-cutting special session would take a day or so away from that topic to at least renew if not reform the insurance program. Now Florida will become the only state in the nation with no personal-injury insurance. That will leave at least 20 percent of Floridians with no or inadequate health insurance for medical bills if they are injured in a traffic accident.

That's a serious problem, and it means that hospital emergency rooms, already burdened with excessive unfunded indigent care, will be expected to provide more uncompensated medical care to uninsured auto victims. It will make a health care crisis much worse and exacerbate the doctor exodus from Florida. Combine that with Crist's proposal to reduce Medicaid and indigent care reimbursements to hospitals like Manatee Memorial and you are creating a perfect storm for health care system collapse.

Gov. Crist's late involvement in the debate is welcomed. But we can't help wondering why he didn't step in long ago, before the special session was called off. His hands-off approach to the legislative process hindered the Legislature's ability to find a solution to the budget crisis. As with the insurance and property-tax reform sessions earlier this year, Crist has been calling legislators "the appropriators" who are supposed to send him a completed plan for an up-or-down decision.

That's not the way state policy ought to be made. It should involve the Senate, House and governor's office working in concert to devise a rational and effective strategy. Eight months into his tenure, Crist's laid-back approach is no longer working. Someone should tell the governor: The honeymoon is over.

There is an urgent need to stabilize state government and reassure worried citizens, business people and investors that someone is at the helm, that Florida is not drifting aimlessly in a turbulent economic sea.

Save PIP, or extend it for now
Originally posted on August 24, 2007

We're losing faith in the ability of our elected state officials to solve the tough problems. We know they flunked on property insurance reform in January, and we fear the property tax reforms passed this year will prove equally ineffectual.

Now the state's flawed no-fault auto insurance system is set to expire Oct. 1. With it will go the only meaningful requirement for drivers to have personal injury protection insurance. The current 36-year-old system has lots of problems, including an industry of corrupt claims that has developed around it, particularly on the east coast. It has also failed to reduce lawsuits as much as hoped.

But if no-fault is allowed to expire without a replacement, things will grow much worse. The number of uninsured motorists on the highways will no doubt increase if drivers are no longer required to present proof of insurance when they register their vehicles. Health care providers, especially trauma centers, will take a big hit (maybe $11 million a year at Lee Memorial) if PIP disappears, since it's the only health insurance for 40 percent of traffic patients at hospitals.

The auto insurers desperately want to dump PIP. They promise rate cuts if it dies - and we all know how good those promises of insurance rate cuts are.

The complex competing interests - including hospitals, lawyers, chiropractors, insurers - have combined to stymie no-fault reform for years. But this is why we have leaders, to find workable compromises that will preserve the good, repair the evil.

Personal Injury Protection reform can wait; renew law
Daytona Beach News-Journal
August 24, 2007

It's unlikely that warring special-interest groups in Florida will ever agree on the best "fix" for the law that requires motorists to carry $10,000 worth of personal injury protection insurance.

It's certain, however, that Florida's emergency rooms will suffer a significant blow if the mandated coverage expires Oct. 1, as it will if lawmakers do nothing. The current no-fault system provides drivers with immediate coverage for injuries received in an accident; without it, they must rely on their own insurance. Lacking that, they simply incur bills they're unlikely to be able to pay.

The statewide impact could reach $350 million in the first year. Halifax Health Medical Center, the area's only Level II trauma center, calculates its potential losses at around $3 million a year. And Florida's Chief Financial Officer Alex Sink warns that much of the burden could shift to private health-insurance plans -- already unaffordable for many Floridians -- and the state's Medicaid system.

The costs of letting the PIP law expire go beyond emergency rooms. It would force many drivers to go to court: Florida's no-fault law went a long way toward stemming litigation in the state. And it could leave the state with little way to ensure that drivers still carry the liability coverage mandated by law. Due to a legal glitch, drivers are only required to prove they have PIP coverage when they renew their car registration.

In Colorado, where lawmakers ended the no-fault system in 2003, an affiliation of hospitals and emergency service providers in that state formed the Trauma Care Preservation Coalition. According to the coalition's survey of 63 Colorado hospitals, litigation climbed drastically while the state's automotive-collision costs in Medicaid increased by 329 percent.

The Legislature plans to come back into session in mid-September, and key lawmakers are finally talking about adding the question of personal injury protection -- or PIP -- to the official agenda. Unfortunately, they still don't have agreement about exactly what form the new legislation will take. Lawmakers seem focused on the question of so-called PIP mills, which bill insurance companies for medical "treatments" that are unwarranted, and, sometimes, imaginary. Fraud is a problem, particularly in south Florida, but it's nowhere near as pervasive as insurers would have lawmakers believe.

Few people would object to reasonable efforts to curb fraud. The problem is that lawmakers are scrambling to define "reasonable," even as they're searching for potential solutions. The chances of coming up with a perfect solution seem slim, and chances for mischief considerable. There will be no time for workshops or extensive public hearings on a change that could affect every licensed driver in the state. And no matter what passes, the Department of Highway Safety and Motor Vehicles will have only a few weeks to implement it.

What's the rush? Lawmakers could easily buy themselves the time they need to do a good job of addressing PIP reform -- including fraud -- by extending the current system a few months or a year. Drivers, insurance companies and regulators could continue under the current system while a new one is devised -- and make ready for an orderly transition instead of hastily adjusting to a new law before they've really had time to read it. Back to Top

Lawmakers must take action on personal injury protection
South Florida Sun-Sentinel.com

August 24, 2007

Don't dump PIP

Our position: The problems with no-fault auto insurance can be addressed.

August 24, 2007

A spark on no-fault

Palm Beach Post Editorial
Thursday, August 23, 2007

House Republicans in Tallahassee acknowledge that they don't have a perfect plan for continuing Florida's no-fault auto insurance system. But they do have a plan.

Unless the Legislature and Gov. Crist act by Oct. 1, no-fault will expire. The Legislature meets on Sept. 18 to cut the budget, which gives Tallahassee a chance to avoid the uncertainty and potential problems that would go with dropping the requirement that drivers buy $10,000 in personal injury protection (PIP) to cover medical bills from an accident. To reach final agreement during the short session, though, the House and Senate must reach preliminary agreement earlier.

According to a report in The St. Petersburg Times, the House leadership would keep the $10,000 limit, which has been in effect since Florida started no-fault almost four decades ago. To reduce fraud, the legislation would require that doctors own clinics that treat accident victims seeking PIP claims. Some scam artists stage accidents, then file phony bills for treatment at clinics that are fronts for the scammers. Two other key parts of the bill would limit fees of lawyers who take PIP cases and require insurers to pay 100 percent of the claim, rather than the current 80 percent.

The Senate, where the trial lawyers have more clout, won't like the restrictions on attorneys' fees. Auto insurers want price limits on treatment. But the Florida Hospital Association quickly praised the bill. The biggest worry with ending no-fault is that injured drivers who have no health insurance will seek treatment at hospitals, which don't want more non-paying patients.

Losing PIP will cost Floridians dearly

Pensacola News-Journal
Published - August, 17, 2007 

Walter Dartland

From air-conditioned seats to GPS navigation, cars turn up with more and more features each year. Soon, however, one feature that may be suspiciously absent from many Florida vehicles will be insurance. That is if Gov. Charlie Crist does not call the Legislature back to Tallahassee to extend Florida's mandatory personal injury protection law.

Without legislative intervention, Florida's mandatory PIP auto insurance law will sunset, and at midnight on Oct. 1 our state will join only four others that require absolutely no insurance to operate an automobile. The result is a wild west of higher premiums for insured drivers, courts clogged with accident litigation and uninsured drivers lacking access to needed medical treatment.

Since four million Floridians hold only the legally mandated minimum insurance and nearly one million vehicles are already uninsured, we can reasonably expect to see a troubling high percentage of uninsured automobiles on our highways.

With nearly 20 percent of Floridians lacking any health insurance, PIP represents the only safety net that many motorists have in the event of an accident. Without the mandatory coverage, drivers could be without access to needed medical treatment � a scenario that could turn minor injuries into lifelong conditions.

What's more, without access to specialists or primary care physicians, uninsured motorists would likely turn to emergency rooms for post-accident care, clogging the system and driving up health-care premiums across the board.

The stakes are high for insured motorists too, as they would undoubtedly see increased premiums to compensate for losses associated with accidents involving uninsured drivers.

Recovering damages from an accident with an uninsured motorist would also require lengthy and potentially costly litigation, drawing out the claims process and potentially delaying necessary medical treatment.

While eliminating mandatory PIP would be a great disservice to Florida's consumers, allowing it to go forward in its current form would be similarly detrimental. Over the years, scammers have established sham clinics, made false claims and defrauded the system for millions of dollars.

It is estimated that, nationally, insurance fraud across all lines, not just auto, costs the average family nearly $1,000 per year in increased premiums.

But fraud will not go away if PIP is allowed to sunset. In fact, when the state of Colorado eliminated PIP, there was no corresponding drop in fraud, only more uninsured drivers and greater risks and costs to consumers.

Whether PIP should be sustained over the long term remains to be seen. But allowing it to sunset without any reasonable alternative would have dire consequences for consumers, businesses, hospitals and other health-care providers.

At a minimum, the Legislature can strike a serious blow against insurance fraud and deliver a victory for consumers by giving investigators and prosecutors the resources they need, stiffening penalties and using civil remedies to go after fraud kingpins.

We urge the governor to add PIP to the special session call and ask the Legislature to extend PIP for a year, allowing consumer groups, health providers, insurers and other interested parties to work together to develop a comprehensive plan for addressing auto insurance fraud.

Insurance choices can be frustrating for shoppers because we buy coverage for those unfortunate events that may or may not ever happen. Gov. Crist and the Legislature, on the other hand, face a much clearer insurance decision regarding PIP.

Walter Dartland is executive director of the Consumer Federation of the Southeast and a founding member of the Coalition Against Insurance Fraud. Back to Top

Don't let PIP RIP

South Florida Sun-Sentinel Editorial Board
August 17, 2007

ISSUE: PIP - RIP?

Florida's no-fault auto insurance apparently is going the way of the dodo bird. Unless state lawmakers agree to extend it, the mandatory coverage, known as Personal Injury Protection or PIP, goes away on Oct. 1.

If that happens, motorists can anticipate even more frustration - and undoubtedly increased costs - in a state already undergoing a crisis in the insurance arena.

Under PIP, motorists are required to pay for coverage that pays up to $10,000 for medical expenses, disability and death benefits. PIP provides an exemption from tort liability and damages for vehicle owners, a feature that takes the inconvenience out of finding fault for an auto accident in court.

Without no-fault, motorists are more likely to find themselves trying to prove fault and wrangle payments to resolve disputes arising from contested accidents. Keeping auto accident claims out of court was the primary reason PIP came into being. If it disappears, so does the bar on the courthouse door.

Motorists also will have to bolster coverage with supplemental medical insurance, a choice that promises no guarantee the new coverage will match the benefits and costs of PIP. The insurance firms opposing PIP claim they will provide similar benefits at cheaper rates. State regulators should make sure that happens.

The situation is murkier for motorists who lack health insurance. While they are entitled to receive emergency treatment, they may not receive follow-up services, especially if they are at fault or cannot pay their physician's bills. Unfortunately, those costs don't stop with the uninsured. The move away from PIP shifts a greater financial burden on local hospital emergency rooms, financed by taxpayers.

Lawmakers need to agree on a plan to extend PIP, while addressing the legitimate concerns of fraud and other shortcomings that come with mandated no-fault coverage. Unfortunately, consensus seems elusive, even as the alternative of change remains just as unsettling.

BOTTOM LINE: Lawmakers must find a way to revitalize mandatory no-fault auto insurance. Back to Top

It will be Florida's fault if no-fault disappears

Palm Beach Post Editorial
Wednesday, August 15, 2007

Florida has spent nearly 40 years trying to get no-fault auto insurance right. Now, Florida is very close to getting it wrong.

Unless the Legislature and Gov. Crist act by Oct. 1, no-fault will expire, and the state will return to the world before 1971. Drivers won't have to buy the mandatory $10,000 in personal injury protection. So, there will be many more uninsured motorists, because many people will want to save money on their policies. But if those uninsured motorists don't have other health insurance and are injured in an accident, they won't be able to pay their bills.

Last week, Chief Financial Officer Alex Sink said failure to renew no-fault would cause "mass confusion." It was her second warning since the Legislature adjourned in May after failing to extend no-fault. But Ms. Sink, whose department includes the Office of Insurance Regulation, hasn't asked Gov. Crist or legislative leaders to include no-fault when the Legislature meets on Sept. 18 to cut the budget. A spokesman said Ms. Sink's comment was based on what happened in Colorado four years ago when that state dropped no-fault. The spokesman said only that Ms. Sink wants the Legislature to "take a look."

Ms. Sink's reluctance to engage on this issue is especially frustrating, because she's right about the "mass confusion." Drivers who don't have health insurance will visit emergency rooms and clinics, which don't want all those added non-paying patients. Expect them to lobby the Legislature for relief if no-fault expires, just as they are lobbying to have no-fault extended.

Lobbying on the other side are many auto insurers, principally State Farm. They are telling customers that the end of no-fault will mean cheaper policies and that the state has other ways to make sure that drivers are "financially responsible." But the insurers are wrong on both counts. Though the personal injury requirement would go away, prices for other coverages may rise; so may the cost of private health coverage. And the Department of Motor Vehicles has stated that the agency has no way to keep uninsured drivers off the road.

Only three states require no personal injury protection (Tennessee, Wisconsin and Iowa). The problem in Florida has been fraud, with sleazy doctors, lawyers and clinic operators faking claims that don't exceed $10,000. In 2003, the Legislature made its last big run at no-fault, and the bill included new efforts to stop fraud. By most accounts, those efforts have had some success. Giving up now would cause problems far greater than the small savings on insurance bills.

Governor Dither and CFO Tut-Tut

By HOWARD TROXLER
Published August 14, 2007

If you put a bunch of wilted, 3-week-old lettuce in one pile ...

And Florida's governor, state chief financial officer and Legislature in another pile ...

The two piles would be just about equal in the leadership they are providing on this big change in car insurance that is happening on Oct. 1.
The governor, Charlie Crist, is darned worried about it. But he respects the Legislature, you know, and doesn't want to seem too bossy. Good grief! Where is Jeb Bush when you need him?

Our state's chief financial officer, Alex Sink, is fretting over this car insurance thing too. She even wrote a letter to the Legislature that said, in no uncertain terms, uh, this bears careful consideration.

A fine pair of jellyfish they are. If they washed up on the beach they would dry right up, Charlie and Alex in the sand. I can just hear the cry of a passer-by: "Eww! I just stepped on a Florida CFO!"

On Oct. 1, Florida's rules for auto insurance are going to change radically. They are going to change in ways that we can't even predict yet. In fact, it is not clear whether after Oct. 1 the worst driver in the world has to have auto insurance in Florida at all.

We are getting rid of "no-fault" insurance, which every driver has had to carry until now. Some folks will buy extra coverage and be better off. Some won't, and their costs will shift from insurance companies to society at large.

But we are backing into this change by default, in the absence of a clear, thought-out decision. A few years ago, the Legislature said: "Hey! Let's let this law expire on Oct. 1, 2007. We'll figure something out by then." But nobody did.

Make no mistake: No-fault stinks, too, the way we have it, which is why folks want to get rid of it. It encourages waste if not fraud. With a $10,000 limit, it's amazin' how often each patient needs ... oh, about $10,000 worth of fixup.

So, change it.

Or if we really want to kill it, at least we need to make things clear before Oct. 1. The state driver's license folks - the Department of Highway Safety & Motor Vehicles - say that as far as they can tell, we won't have to have ANY insurance in Florida anymore.

What should the governor and the CFO do? They should take a stand. They should lead the charge to put pressure on the Legislature. They should bang the drum, preach from the pulpit. After all, the Legislature is convening on Sept. 18 for a budget session anyway.

I know, I know. There are politics about these things. But there are ways to go about it. Call 'em your friends. Tell 'em how much you respect 'em. Shine their shoes if you must. But, by gosh, make it clear that you think they have to do something, and that the people of Florida ought to be demanding it too.

What a weird way to run a state! Despite what publicity there's been, I don't think the people of Florida have fully tuned in to the changes that are coming. Lots of folks won't until they get in a wreck, when it will be too late.

Let's hear from Gov. Crist and CFO Sink, instead of Gov. Dither and CFO Tut-Tut. Back to Top

Back to the bad old days on automobile insurance?

Published - August, 10, 2007