Florida Lawmakers Continue to Push for Car Insurance Reform

A slightly modified version of the Florida House’s latest attempt at retooling the state’s auto insurance system has gotten the OK from the Economic Affairs Committee–the final committee required to give its approval before the legislation moves on to a vote from the full House.

But the prospects of the bill being successfully signed into law appear to be fading fast.

The close of the legislative session is fast approaching, committee approval votes for the bill have all been along party lines, and a competing and substantially different reform measure has been circulating in the state Senate.

Rep. Jim Boyd has proposed in his bill, HB 119, that the state get rid of and replace the current system in which drivers must purchase at least $10,000 of personal injury protection (PIP) coverage.

According to the state Department of Financial Services, PIP compensates policyholders for “80 percent of all necessary and reasonable medical expenses incurred as a result of a covered injury” sustained in a crash. It also pays for things like replacement services and work-loss and death benefits.

Introducing: Medical Care Coverage

But if Rep. Boyd’s bill does get approval from the full House, Senate and governor before the session closes, PIP would be replaced by a new type of policy called medical care coverage (MCC), which is similar to PIP but includes more restrictions on the types of conditions and treatments that auto policies would cover.

The new restrictions are designed to keep insurers from having to pay for care that is initially diagnosed long after the initial accident.

They also, in theory, would cut unlicensed chiropractors, acupuncturists and other types of care providers out of the automobile insurance coverage equation.

Mandatory MCC, like PIP, would include a minimum $10,000 limit. And providers would have to cover 80 percent of the following reasonable expenses up to that limit:

  • Emergency transport and treatment provided by a licensed ambulance service within 24 hours of an accident
  • Emergency services and care provided by a licensed hospital within 72 hours of an accident
  • Hospital services and care provided to people who are covered under a policy and are admitted within 72 hours of an accident
  • Services and care related to an emergency medical condition that was initially diagnosed during the 72-hour period, but only if the care is provided by a physician in a hospital

Care providers would also be subject to a fee schedule outlined in the bill.

While that significantly reduces what’s covered, the original version of Boyd’s bill went even further.

Initially, HB 119 required insurance providers to cover only emergency room care and further care for emergency medical conditions. But the Economic Affairs Committee ultimately adopted a substitute that would allow policyholders to get emergency coverage from licensed hospitals.

Boyd also compromised on a section of the bill that would have required medical care providers to submit testimony under oath regarding a claim if it were requested by an insurance company.

Insured drivers will still have to submit to examinations under oath if requested by an insurer, but doctors and other medical care providers won’t.

Reform’s Ultimate Goal

The ultimate goal of these reform measures is to help broaden the availability of cheap insurance in a state where policymakers say scammers are bilking insurers out of millions by filing unnecessary claims and inflating the cost of legitimate claims in order to squeeze every penny of mandatory $10,000 PIP policies.

Payments for that unnecessary medical care, insurers say, are hurting their bottom line and prompting perennial rate increases for Florida drivers in order to maintain their profitability.

According to data provided by insurers to the state’s Office of Insurance Regulation, paid PIP benefits increased by $940 million between 2008 and 2010, an increase of 70 percent.

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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