Lawmakers try to make U-turn on tort system

But no-fault bill faces tough road late in session

By Lynn Bartels, Rocky Mountain News (Contact)

Friday, April 4, 2008

A group of lawmakers wants Colorado to return to a form of no-fault car insurance but have run into a roadblock.

They say the tort system Colorado switched to in 2003 has resulted in less coverage, higher health care premiums and delays in paying hospitals and ambulance companies for medical services.

A proposed no-fault bill has been drafted. But sponsors need permission to introduce it this late in the session, and they're not sure that will happen because of opposition.

"We have quite a road ahead of us," Sen. Bob Hagedorn, D-Aurora, said Thursday.

Fans of the tort system say it has resulted in lower premiums, in part because drivers who already have health insurance are no longer mandated to buy extra medical coverage.

"My premium went down 40 percent after we switched to tort," said Bill Imig, the lobbyist for various insurance companies. "I'm a happy camper. For me, the system works great. For most people the system works great."

Sen. Jennifer Veiga agreed. The Denver Democrat and chairwoman of the Senate Business, Labor & Technology Committee doesn't want to return to even a milder version of no-fault. They said she believes tort is working.

Hagedorn and others agree there were problems with the no-fault system. Quasi-medical practices - aromatherapy and such - were blamed for driving up premiums.

Sen. John Morse, D-Colorado Springs, said drivers do like the new insurance system - until they are in an accident and see how it works.

He said most drivers don't buy the optional medical insurance that auto companies offer. When they get injured they discover their health insurance doesn't cover rehabilitation and other services. Or else they don't have health insurance.

Veiga and Imig did agree that there are problems making timely payments to hospitals and ambulance companies under the new system. Under no fault, payments usually were made in 30 days.

Hagedorn said rural health- care services already struggle.

"To lose a rural ambulance service, to lose a rural hospital, is simply not acceptable," he said.

bartels@RockyMountainNews.com or 303-954-5327

Driving forces

Colorado switched from a no-fault car insurance system to a tort system in 2003. Now some lawmakers want to return to a version of no-fault.

Pre-2003 no-fault system

* Medical bills were paid by each driver's insurance company regardless of who caused the accident.

* The insurance included a medical-care provision regardless of whether drivers had their own health insurance.

* The minimum coverage a driver had to buy:

$50,000 for medical

$50,000 for rehabilitation

$30,000 for lost wages and essential services.

Today's tort system

* Drivers have the option of purchasing the medical provision portion of the insurance policy.

* The at-fault driver's insurance company is liable to pay medical and other costs, once fault is determined.

Proposed system

* Medical bills are paid by each driver's insurance company regardless of who caused the accident.

* The insured pays a 10 percent co-pay.

* The patient has to receive medical care that demonstrates improvement, or the care stops.

* The minimum coverage a driver must buy:

$25,000 for medical

$20,000 for rehabilitation

$15,000 for lost wages and essential services.

• April 4, 2008

  6:27 a.m.

  Suggest removal

  JanetW writes:

  So they're going to force me to buy insurance that I already have, raising my premiums back up to the 2003 levels?

  This is good government, how? Raise my auto insurance premiums so I can have duplicate coverage. Brilliant.

• April 4, 2008

  10:02 a.m.

  Suggest removal

  evan writes:

  This is great government. I have been in a crash that was not my fault and the person who hit me had no coverage, no assets, no nothing. My health insurance only covered some treatment. Not to mention my out of pocket for co pays, deductibles... Then I was forced to litigate against the auto insurance company. No matter what my treating drs said they could care less. I have looked at the data. I am paying more $ to get the exact same coverage I had before. Maybe auto rates went down 8% (according to studies) but the coverage dropped by 80%. Only a good deal if you are a CEO of an auto insurance co. By the way the made 5 BILLION in profits last year alone. 5 BILLION. They could lower rates if they wanted and maybe make "only" 4 BILLION. If you or anyone you know gets in a crash in this system you are screwed. Ask anyone with out med pay and was hurt in a crash how they feel about the new law. We NEED our government to help out. Our health insurance rates have increased due to the shift from auto to health coverage in a car crash.

• April 4, 2008

  10:18 a.m.

  Suggest removal

  rwmorrisonjr writes:

  Evan, I'm sorry for your situation, but you did have the option to buy the additional coverage when you bought your policy. Now that you're in a bad situation, you want your insurance company to change its contract with you, that you voluntarily signed, in order to cover you for your losses, and then ask the government to force unwanted changes on the general public. Sorry, but I'm not a big fan of this change that would force me to buy duplicate coverage and raise my rates. If this passes, it would just be another reason for me to register all my vehicles in Wyoming.

• April 4, 2008

  11:04 a.m.

  Suggest removal

  DRRKREMER writes:

  Let's look at the facts:
  It costs more today for comparable coverage. Unbundling previously bundled and yes, mandatory coverages costs the consumer more today. To settle a claim you almost always need an attorney who can charge up to 40% or more of the settlement. Is the current tort system pro-consumer when you are involved in a claim? Absolutely not. I applaud Sen Hagedorn for bringing this issue forward. THis issue needs balance. It is out of balance and needs fixing!

• April 4, 2008

  11:04 a.m.

  Suggest removal

  evan writes:

  RW. Thanks for the comment. I do not want my insurance co to change my contract. My Insurance agent never really explained med pay to me, the consumer. I was given false info. Just like everyone else who thinks this is a good idea until they are in a crash. The government had already made insurance with a $25,000 liability option. This is mandatory. This does nothing to cover me. Also Rw. If you hit me in your car from wyoming and I do not have med pay. I am forced to sue your insurance company and if you did not raise your liability (that was mandatory by law to have some)I will have to come after your assets and go to court. Not something either of us want. If I had med pay, if we all had med pay to cover our bills, I would not have to go after you in court to cover my health care bills. The attorneys like this but I just want treatment. Most people do not have health insurance. and the ones who do can not cover the policy they have ie huge deductibles.

• April 7, 2008

  9:52 a.m.

  Suggest removal

  msseana writes:

  Who wrote this article? Are they getting all their info from an insurance company-the bias is very strong. I have not saved any money since the law changed. I decided to purchase med pay coverage and it costs me 7 dollars a month (100,000 dollars of coverage)to be a responsible citizen on the road and know that I am protected and won't suffer life changing consequences with my health and finances if you hit me, can you say the same?? When people realize they need this protection it's usually too late. Mandatory coverage is inexpensive and then you are not counting on the person who hits you has coverage. This is a classic example, CYA and you will not regret it-and for those who aren't informed the mandatory coverage is protecting EVERYONE, that's the point.

• April 7, 2008

  11:04 p.m.

  Suggest removal

  jm48 writes:

  These lawmakers have been bought by the insurance companies...they will parrot whatever these companies tell them. The insurance lobby is the most powerful in the country.