Dec. 18--After almost half a century, Florida's no-fault car insurance system would end by 2019 under a bill filed by state Sen. Jeff Brandes, R-St. Petersburg.
That's potentially fantastic news to consumers like Loren Egley of Delray Beach, who say it's like "double taxation" when the state forces them to buy Personal Injury Protection (PIP) medical coverage for car accidents though they already have health insurance such as Medicare.
Florida drivers pay the nation's fourth highest car insurance premiums. The state is one of a handful with a no-fault system.
"The system is broken and rife with fraud and abuse," Brandes said. "There is no amount of tweaking that will fix PIP. Florida can do better, and this repeal will force policymakers to address this important issue impacting every driver in our state."
SB 1112, filed on Dec. 11, would repeal the law requiring drivers to buy $10,000 PIP coverage to pay for injuries regardless of who is at fault in an accident.
The system was designed in the 1970s to reduce lawsuits and get claims paid quickly. Despite repeated attempts to fix it, it has been plagued by fraud, overflowing lawsuits of its own and high premiums for relatively little coverage.
Other attempts to kill PIP have failed as interest groups including hospitals and insurers lobbied to protect the system. Gov. Rick Scott has said he wanted to preserve PIP and give reforms a chance to work. But Brandes has been an important player driving the agenda on flood insurance and other issues, and his sponsorship could matter a lot.
Scott "will review any legislation that makes it to his desk," a spokeswoman said last week.
The rumblings have been out there. The filing follows comments by the state's top regulator at an industry conference in October questioning whether the system is worth "fixing" again -- and wondering if maybe it's just time to end it, as The Palm Beach Post reported.
"What do you do?" Insurance Commissioner Kevin McCarty said. "Here's an idea. I'm just throwing it out there for discussion. Let's just repeal PIP and do nothing."
An overhaul backed by Scott's personal lobbying in 2012 eliminated massage and acupuncture and reduced non-emergency benefits to $2,500. It passed two days after Scott's Let's Get to Work committee accepted a $100,000 contribution from a Miami auto insurer.
The bill's target for PIP rate cuts was 25 percent. Consumer savings on overall bills were virtually zero, The Palm Beach Post reported early this year.
A series of arrests last fall in Palm Beach and neighboring counties, some featured on an A&E documentary special, showed PIP fraud had not ended despite reform attempts.
But it's not just bad guys faking accidents or providing phony care who have been accused of ripping off the PIP system.
A lawsuit on behalf of drivers has claimed HCA hospitals in Atlantis and around the state are using up the entire $10,000 in PIP benefits in as little as a single day. The suit blames exhorbitantly-priced diagnostic scans, costing up to 65 times what Medicare pays. Hospital lawyers said the case lacks merit.
Penny Wollmen, one of the drivers in the suit, said a chiropractor told her there were no benefits left to pay for his services. "I was crying," said Wollmen, who said she had four kids and had to drive her husband to work in their one remaining car. "I couldn't get the proper treatment."
A group representing hospitals argued killling PIP would not be a good solution because it would still leave big problems for the state to solve.
"While more Floridians have health care coverage through the Affordable Care Act, there are nearly 3 million people in Florida who remain uninsured," the Florida Hospital Association said in a statement. "PIP serves as the only form of coverage for uninsured individuals who seek emergency care following an auto accident. If PIP is eliminated, coverage for uninsured motorists must be addressed through options such as medical payment policies, which provide a limited form of insurance coverage."
The Personal Insurance Federation of Florida, representing some of the state's biggest car insurers, has "yet to consider and discuss this legislation" and had no immediate statement, executive director Michael Carlson said.
But many drivers say as the federal health law covers more and more people, and they see a huge net win by eliminating PIP coverage that can account for 20 percent or more of a consumer's total bill. Colorado drivers saved 35 percent on their overall bills after dropping a no-fault system, The Post reported.
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