Hospitals Urge Crist To Act On No-Fault Sunset

Two hospital groups gave Florida Gov. Charlie Crist a letter today arguing that the expected expiration of the state's no-fault auto insurance law qualifies as a topic for the special legislative session on the budget because of the financial impact involved.

Florida Hospital Association (FHA) and the Safety Net Hospital Alliance of Florida (SNHAF) said they warned Gov. Crist that the expiration of no-fault has a direct impact on the state budget.

While they gave no total dollar figure, two of the seven budgetary impact points they mentioned would alone add up to $126 million. The no-fault law is due to sunset Oct. 1.

Specifically, the two hospital associations raised concerns about the budget consequences of no-fault's sunset on Medicaid, court costs, law enforcement, police pensions, the State Health Insurance Program, children's health care, and the Florida Department of Highway Safety and Motor Vehicles.

FHA and SNHAF are heading the Coalition to Protect Florida's Drivers, which is pressing the governor and legislative leaders to either reform and extend the current no-fault system, or to replace it with minimum mandatory auto insurance coverage that protects people and property.

Regarding the financial impact on Medicaid, the groups said personal injury protection insurance now covers the first $10,000 of medical costs incurred by all patients who are Medicaid eligible.

Without PIP, those costs will be shifted to Medicaid, they said. All Floridians, but especially the two million enrolled in Medicaid, deserve a credible estimate of the additional costs to this vital program. The Agency for Health Care Administration (AHCA) should provide such an estimate for consideration during the special session, the organizations said.

On court cost impacts, they said Florida is already “the most litigious state in the nation and Chief Financial Officer Alex Sink has warned the Legislature that without PIP, there will be an increase in litigation related to auto accidents.”

Without no-fault, there will have to be a determination of fault for all motor-vehicle owners. With more than a quarter of a million crashes last year, the fiscal impact on our court system could easily exceed $100 million, according to the groups' estimate.

Although the budget impact has not been calculated, there will be a need for additional court services at all levels as plaintiffs previously unable to sue for non-economic damages would be free to pursue litigation, the organizations said.

The need to determine fault also adds costs to law enforcement at all levels–highway patrol, sheriff's deputies and city police officers to testify in court cases and document accident investigations. Those responsibilities take personnel from current duties, resulting in higher costs to cover vacancies and/or overtime expenses, the hospital groups wrote.

With the loss of PIP premiums, the chapter 185 law enforcement pension enhancements could be impacted. A determination of the financial implications on our public safety personnel who benefit from the 185 funding must be addressed, the letter said.

The groups noted that Blue Cross and Blue Shield of Florida provided an estimate to the Department of Management Services (DMS) concerning the increased costs if medical costs are shifted from PIP to the State Health Insurance Program.

Blue Cross and Blue Shield of Florida estimated the cost impact to be in the range of $4-to-$7 per member per month, or as much as $336 annually for a family of four.

The health insurance programs designed to provide affordable insurance for families with children could see an increase in premiums as PIP costs are shifted to those programs. This could increase the incidence of families dropping coverage for their kids if premiums are increased, the letter said.

The Department of Highway Safety and Motor Vehicles (DHSMV) has told the Legislature that general revenue will be negatively impacted by $28 million without PIP, the letter recounted.

With property damage liability insurance coverage still required, but enforcement of this requirement severely weakened, the department will lose the revenue collected from fines or reinstatement fees paid by drivers who drive without mandated coverage, according to the hospital groups.

The letter noted that for several months, many advocacy organizations–including the newly created Coalition to Protect Florida's Drivers–have been calling for no-fault automobile insurance to be added to the special session agenda.

The expiration of no-fault and PIP hurts all Floridians with the loss of accident coverage and the potential impact on our health system, but now it's dealing an unseen blow to the taxpayers who fund our troubled state budget, the letter said.

“As we peel back the many layers of the loss of no-fault auto insurance coverage, we can quickly see the potential impacts on our state budget and why this issue should be considered within the context of the budget deliberations during special session.

“In your fiduciary role on behalf of the taxpayers of Florida, we would ask that you include the sunset of no-fault automobile insurance in budget discussions and relieve the taxpayers of the burden of paying for the loss of no-fault automobile insurance through either reforming or extending this essential program.”

The letter was signed by Wayne Smith, Florida Hospital Association president, and Tony Carvalho, Safety Net Hospital Alliance of Florida president.