Bill to bring back no-fault insurance defeated

By Richard Haugh

A bill returning no-fault insurance to Colorado was killed Feb. 18 by a 7-3 vote in the House Business Affairs and Labor Committee.

In 2003, Colorado switched to a tort system of auto insurance, in which the at-fault driver’s insurance pays for medical bills and property damage. House Bill 1226, sponsored by Rep. Anne McGihon, D-Denver, and Sen. Morgan Carroll, D-Aurora, would have reversed that.

Auto insurers say bringing back no-fault insurance would cost Colorado drivers millions of dollars in premiums. A study commissioned by Gov. Bill Ritter’s office in 2007 found that dropping mandatory medical payment coverage saved the average driver $322 a year — a 35 percent drop.

McGihon’s bill would have addressed concerns from some that, although insurance premiums have fallen, many drivers lack coverage in an accident because their health insurance covers little or none of their medical expenses — and the uninsured aren’t covered at all.

As a result, first responders, emergency physicians and hospitals took a hard financial hit. The Ritter study found that hospitals lost $175 million in 2006 because of the change to a tort system.

To fix that, Ritter last year signed Senate Bill 11, requiring insurers to offer a minimum of $5,000 of medical-payment coverage. But drivers aren’t required to have the so-called “med-pay” option and can opt out of coverage.

McGihon’s bill would have required each driver to have coverage for a minimum of $25,000 per person and $50,000 per accident in bodily injury, and $15,000 for property damage. It also would have required personal injury protection (PIP) coverage for 90 percent of medical expenses up to $25,000, 90 percent of rehabilitation services up to $20,000, up to $15,000 for loss of gross income and essential services and $5,000 in death benefits.

Critics of McGihon’s no-fault bill want to see if SB 11 boosts reimbursement to emergency responders before tinkering with tort reform again. The Colorado Hospital Association has set up a system to track how many accident victims treated in emergency rooms have med-pay coverage. That data won’t be available for a year or more, said Steven Summer, president and CEO of the hospital association.

Auto insurers and the Colorado Trial Lawyers Association (CTLA) strongly opposed HB 1226. Insurers warned that a return to no-fault would cause a big jump in auto premiums. Trial lawyers disliked a provision in the bill that would have limited awards to plaintiffs (and therefore fees to attorneys) for economic and noneconomic damages from an accident.

McGihon couldn’t be reached for comment.



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