Auto Insurance System (09/21/2005)

Final
STAFF SUMMARY OF MEETING

AUTO INSURANCE SYSTEM

Date:	09/21/2005	ATTENDANCE

Time:	10:12 AM to 04:08 PM	Cadman	X
		Carroll M.	X
Place:	LSB A	Cerbo	X
		Cloer	X
This Meeting was called to order by		Gordon	E
	Representative Coleman	McElhany	X
		Tochtrop	E
This Report was prepared by		Wiens	X
	Jeanette Chapman	Veiga	E
		Coleman	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
Interim Committee on Auto Insurance		-

10:12 AM

Representative Coleman brought the committee to order and made a statement preceding the testimony of David Rivera, Commissioner of Insurance. Representative M. Carroll then discussed her concerns with the data that the division had cited in previous testimony and in the Division's response to questions from the first meeting of the committee. In her study of the information, she indicated her analysis had shown that several companies had not lowered rates and that some had actually increased rates since the switch from no-fault to tort. She cited information that she provided to the committee (Attachments A, B, C, and D). She expressed concern about these issues as well as data that suggested that some insurance companies had actually raised rates immediately before the switch. Senator McElhany noted his confusion as to which types of rates had increased and whether it was possible to tell from the data which types of insurance were responsible for the increases. Representative Cadman asked if the rate increases could be attributed to increases in individual coverage that some people felt were necessary to maintain personal injury protection.

10:32 AM

David Rivera, Commissioner of Insurance in Colorado, began his discussion intended to address questions posed to the Division of Insurance in a previous committee meeting. He provided four handouts to the committee (Attachments E, F, G, and H). He began going through the questions submitted by the committee (see Attachment G).

10:57 AM

Regarding question four, Representative M. Carroll expressed concern that the division had used particular carriers to demonstrate rate decreases. The information Representative M. Carroll and Representative Coleman looked at indicated a different result in increase or decrease of rates.

11:11 AM

Representative M. Carroll questioned the language in the response to question five that suggested that soft-tissue injuries were somehow less valid than hard-tissue injuries. She stated that soft-tissue injuries are more likely in car accidents than broken bones or hard-tissue injuries.

11:30 AM

Representative M. Carroll read through her remaining questions for Commissioner. Representative Coleman expressed appreciation for the information provided by the Division, and suggested that further discussion be tabled until the October 5 meeting, given the time constraints today.

11:41 AM

Jerry Rhodes, Chief of the Cunningham Fire Department and former Chairman of the State Emergency Medical and Trauma Services Advisory Council, provided a history of the emergency medical and trauma system in the state. He provided two handouts to the committee (Attachment I and J). He described the process by which trauma care evolved over time, developing fire services, private and county ambulance services, and volunteer ambulance squads. He also discussed the development of the state trauma system and state regulation of the system. He noted the state's role in designation of state trauma centers and described the various levels of designation. Representative Cadman asked about administrative costs of the Council and the work that they do. Mr. Rhodes explained the way funds are collected and spent for the program.

12:04 PM

The committee recessed for lunch.

01:18 PM

The committee came back to order.

01:18 PM

Renee Beauregard, Consumers United Association, discussed her report on the impact of the change in auto insurance systems on consumers in Colorado. She provided a handout to the committee (Attachment K). The report reflected an informal survey from Consumers United's web site that asked consumers how they felt about the switch from no-fault to tort in Colorado. Responses to the survey indicated that many consumers are well informed when they purchase insurance. Those who said they were uninformed related that they did not receive information from their insurance provider. Those that described themselves as uninformed tended to be significantly uninformed and this hampered their decision-making process when it was time to purchase insurance. Ms. Beauregard expressed concern that these consumers may not be making good decisions about their needs because of this lack of information.

The survey indicated that many consumers are not opting to choose medical payments coverage. Of those who do not purchase medical payments coverage, some already have private insurance, but there are individuals who appear unaware that such coverage might be useful, particularly if they do not already have medical insurance. For those who opted to purchase medical payments coverage, their policy rates did not go down. The survey also indicated that, for the most part, consumers feel that their claims are being paid in a timely fashion. Those who indicated problems with getting claims paid, did not have medical payments coverage. She proposed that the legislature require consumers to show proof of medical coverage in order to opt out of medical payments coverage. She also suggested requiring insurers relay the same information type of about the uses of medical payments coverage. Representative Coleman asked Ms. Beauregard to discuss some of the tables in her report.

01:51 PM

Todd Herried, Legislative Council Staff, discussed a memo he prepared regarding trauma funding in other states (Attachment L). He responded to questions from the committee concerning the material discussed in the report.

01:55 PM

Scott Manley, Craig Hospital, described the experience of the hospital and its patients with the switch from no-fault to tort. He provided a handout to the committee (Attachment M). The hospital is a private, specialized hospital that treats only spinal cord and traumatic brain injury patients. Under the tort system, Craig Hospital has not admitted any patients who have received any benefits/payment for rehabilitation services for the 28 automobile accident related admissions in fiscal year 2005. It is his belief that current health care plans generally have very limited coverage for catastrophic injuries. In his opinion, the reduction in health plan benefits shift costs to consumers and Medicaid because insurers pass their costs on the employer's and consumers. He proposed changes to the state's health and auto insurance systems that would eliminate arbitrary limits on care, treating catastrophic injuries like other medical conditional using medically necessary standard or utilization review, establishing fees either through automobile registration or creating a catastrophic injury fund.

02:21 PM

The committee recessed.

02:24 PM

Kevin Klein, Colorado State Fire Chiefs' Association, introduced himself and described the organization of the Trauma Care Preservation Coalition. He provided three handouts to the committee (Attachment N, O, and P). He introduced Dr. Andrew Berson, also of the Trauma Care Preservation Coalition.

02:26 PM

Dr. Andrew Berson, Trauma Care Preservation Coalition, began his presentation of policy considerations for sustaining the trauma system in the state. He believes that, without changes to how the system is funded, the state's trauma system will collapse. Mr. Klein continued the discussion by noting that after the switch to tort, there was a 400 percent increase in the number of automobile accident patients who were unable to pay for the care they received. There was also a 125 percent increase in Medicaid payments for care related to auto accidents and Medicare payments increased 171 percent. Mr. Klein then discussed proposed funding ideas for trauma care. The primary recommendation from the Coalition would be a mandatory coverage for medically necessary emergency care. This care would be limited to immediate acute care, traumatic injury care, and immediate hospitalization and health insurance would cover any remaining care. Senator McElhany asked about the necessity of consolidating the trauma care system. Dr. Berson agreed that a case could be made for spreading the trauma system around the state instead of having all level one centers in the Denver metro area. He does not believe, however, that there are "too many" trauma centers in the state.

02:48 PM

Pamela Hanes, Colorado Health Institute, presented information requested from a previous meeting of the committee comparing personal injury protection coverage limits in other no-fault states. She provided a handout to the committee (Attachment Q).

PUBLIC TESTIMONY

03:09 PM -- Linda Gibbard, representing herself, discussed her experience trying access treatment for injuries from an auto accident under the tort system.

03:20 PM -- Dr. Lynn Parry, Colorado Medical Society, spoke about recommendations of CMS for potential legislation. She discussed one of the patients that she has dealt with and their experience in the rehabilitation system. She provided an attachment to the committee (Attachment R).

03:30 PM -- Don Mielke, Colorado Chiropractic Association, spoke about ideas for potential legislation. He provided four handouts to the committee (Attachment S, T, U, V).

DISCUSSION OF POTENTIAL LEGISLATION

03:43 PM

Committee discussion went to proposed bill ideas.

03:44 PM

Kristin Forrestal, Office of Legislative Legal Services, asked questions about her ability to accept proposed drafts. Representative Coleman stated that they would try and address all proposals that had been forwarded to her. Representative Coleman also explained the process for designating bills as interim committee bills.

03:51 PM

Representative Coleman discussed her thoughts regarding possible committee bills. She also presented an idea from Representative Cloer regarding trauma funding, possibly through a fine.

04:02 PM

Representative M. Carroll identified the bill ideas she's considering.

04:07 PM

The committee adjourned. The next meeting will be October 5, 2005, starting at 10am.