Key Florida Senator Ready to Kill PIP Car Insurance Coverage

He’s called it “poop.”

He’s called it “broken.”

Now, Florida State Sen. David Simmons (R-Altamonte Springs) is waiting for the right time to take the state’s no-fault auto insurance system out back and shoot it, through legislation that would end the 42-year-old no-fault law.

“PIP in Florida is on its last gasp,” Simmons told Online Auto Insurance News (OAIN). “It’s time for us to move to a mandatory bodily injury system. It’s time to move on to what the rest of the country does.”

Yet, the Florida Legislature is on hold. Lawmakers are waiting for a key ruling from the state District Court of Appeal, which will rule whether reforms that took effect earlier this year are constitutional.

Following Reforms, PIP Not Cost-Effective for Some

Florida is one of 10 states that require personal injury protection (PIP) coverage. Motorists there must carry a minimum policy of $10,000, with only $2,500 of that now eligible for spending on non-emergency care.

Florida lawmakers created the PIP system as a way to ensure motorists’ injuries were covered as a result of a traffic accident. The no-fault insurance is supposed to help cover people who may lack health insurance and pay medical costs in a timely manner.

But fraudsters have taken advantage of the no-fault provisions in the law, leading to staged auto accidents designed for quick payouts. And while Simmons said the intent of PIP was to focus on emergency care, claim money routinely goes to massage therapists and other alternative health providers, some of whom have built entire businesses based on PIP payouts.

Couple that with the costs of true emergency care, and PIP has become a money loser for insurers and consumers, Simmons said.

“Consumers in Miami-Dade County spend $2,500 for PIP,” Simmons explained. “For non-emergency treatment, the current cap on payouts is $2,500. So the consumer is spending $2,500 for the chance to one day claim $2,500.”

With an almost dollar-to-dollar payout scheme in some areas of Florida, Simmons said he is not concerned about consumers unable to collect claims in a timely manner.

Nor is Simmons concerned about the injured being stuck with huge medical bills after an accident.

“If Obamacare provides health coverage to 85 to 95 percent of people, the PIP becomes redundant for most drivers,” Simmons said.

Support Grows, but Action Hinges on Court Decision

In Florida, support is growing to get rid of PIP. Other key legislative members have floated the idea, and Gov. Rick Scott told the Palm Beach Post that “It’s appropriate for the Legislature to look at other options [other than PIP].”

But for that support to translate into action, the Legislature needs to see what will happen in the court case contesting reforms passed last year that took effect in January. Those reforms capped non-emergency care payouts, while prohibiting alternative health providers from collecting on claims for treatment. The court case was brought by a group of acupuncturists, massage therapists and chiropractors and questions the constitutionality of the reforms.

If the reforms are found constitutional, support for killing PIP will most likely decline, as lawmakers look at more pressing issues.

There’s also pressure from powerful lobbies to keep PIP.

The Florida Hospital Association (FHA) strongly supports PIP. FHA representatives testified at the Florida Senate Banking and Insurance Committee earlier this session, stating that hospitals treat some 418,000 auto accidents, and that the mandatory bodily injury system can slow down payments for at-fault drivers.

As for Obamacare, the FHA noted that even fully funded, some 2 million Floridians would be uninsured under the Affordable Care Act.

Yet Simmons said most other stakeholders in the PIP system are ready to move on.

“Insurers and providers and attorneys are fed up with it, and find it to be insufficient in it’s benefits to consumers and highly susceptible to fraud,” Simmons added. “To say it’s broken, or that it’s poop, that’s an understatement at this point.”

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