No-Fault

No-fault. What a bore, but it’s the #1 issue in the state right now. So let’s try to figure it out. Start from scratch.

On October 1st, for the first time in 36 years, drivers won’t be required to buy $10,000 of medical insurance to cover them and their passengers in an accident regardless of who is at fault. (It’s called PIP, personal injury protection.) Why? Because the auto insurance companies got sick of paying for the fraud or over charging by hospitals, doctors and clinics and personal injury lawyers that occurs with PIP as we know it. Maybe their profit margins are being squeezed these days and they decided it was time to demand a change from the legislature. And they were joined by the personal injury lawyers whose caseload would jump if people had to sue to prove accident fault. Always follow the money. The legislature four years ago tried to do something about this but all the interest groups deadlocked over reforms. And they passed a bill to repeal PIP on Oct. 1st.

Crist backs no-fault reform. He and the legislative leadership are refereeing the interest groups like crazy and it smells to me like there is going to be a special session any day now that’s going to reform and extend No Fault. We’ll see.

What if PIP expires? Let’s figure it out, because right now I’m dazed and confused. Now, if you have an accident, PIP pays your medical. If you’re part of the 80% in Florida who have health insurance, your health insurance will pay your medical after Oct. 1st. That means health insurance is going to go up, $6 per person a month, but maybe it’ll be a draw since you won’t be paying up to $200 a year for PIP. It also means bodily injury liability coverage will go up since the 20% without health insurance may file a claim against your insurance company trying to prove you caused the accident. They’ve already started raising these rates, proactively. So make sure you have bodily injury now.

Now what about the 20% without health insurance who won’t have PIP? They better buy accident medical payments insurance. But a lot of them won’t. A lot of them will be wiped out financially, and the really poor will be treated for free by the hospitals, emergency rooms and doctors. Wait a second. Where are the hospitals gonna get the money to pay for all these people? Oh, now I see why they want PIP. Right now they overcharge PIP cases and use the money to fund their indigent care. You know, the $5 aspirins. They’re gonna lose $350 million without PIP. Right now Florida hospitals are financially sound. Post-fault will eat into their budgets. To compensate, the local governments that fund their indigent care will have to contribute more, cut budgets or raise property taxes, if they can. Trauma centers and indigent care may be cut back. It happened in Colorado when they repealed no-fault in 2003. There was a 400% increase in charity cases. My head is spinning. What’s a Progressive to do? Tomorrow.