INDIANAPOLIS (April 3, 2008) – Legislation requiring Colorado auto insurance consumers to purchase mandatory medical benefits coverage is unnecessary and will drive up insurance rates for all consumers, according to the National Association of Mutual Insurance Companies (NAMIC). In written comments sent to the Senate Health and Human Services Committee, NAMIC argued that SB 211, Mandatory Payments Auto Insurance Coverage, would have adverse unintended consequences for insurance consumers and would actually hurt those it seeks to help.
“Insurance consumers should not be forced to purchase insurance coverage they can currently purchase voluntarily if they so desire,” said Christian J. Rataj, Western state affairs manager for NAMIC. “Each person should have the legal right to determine how best to address his or her health insurance needs, including what type of medical benefits coverage to purchase, the amount of their deductible or co-payment responsibilities, and the scope of the coverage benefits.”
SB 211 would require all auto insurance consumers to purchase $25,000 in medical benefits coverage for themselves as part of the mandated state insurance requirements to lawfully operate a motor vehicle in Colorado. In his written comments to the committee, Rataj called the bill "anti-consumer choice" legislation, and pointed out that "it is the consumer’s hard earned dollar at stake, so it should be the consumer’s choice as to how best to address his or her family's medical coverage needs."
According to Rataj, "when you mandate a new coverage requirement, you are, in effect, mandating a new cost to the insurance consumer. A state legislature should not create a new economic burden for insurance consumers unless the state can show a compelling reason why this is necessary to promote the general welfare of the citizens of the state.
“This proposed law is an example of benevolent paternalism that has gone awry,” he said. “The vast majority of consumers – 83 percent per recent studies - already have comprehensive health insurance coverage in place to take care of their medical coverage needs. For these consumers, this mandated coverage would merely duplicate most of the primary medical coverages in their current health insurance policy and create an unnecessary financial burden for the consumer without providing any corresponding benefit.”
In Rataj's letter to the committee, he said the legislation would increase annual auto insurance premiums for consumers and could have adverse unintended consequences for the state's economy and local business community.
“As annual premium costs rise, so, too, will the number of consumers who are unable to pay the cost associated with complying with the state’s financial responsibility law,” he said. “SB 211 is likely to drive up the uninsured motorist rate in the state, which will eventually lead to higher liability and UM/UIM coverage costs for all consumers.”
Colorado citizens who don’t have health insurance generally can’t afford it, Rataj said. “Why would they be able to afford this mandated medical care coverage?”
Ultimately, Rataj said, the bill would hurt those it seeks to help. “Why should this financially disadvantaged group of people be forced into a Hobson's Choice between purchasing mandated coverage they cannot afford or becoming an uninsured motorist, subject to serious criminal sanctions,” he said. “Forcing them to spend money they don't currently have so that they can have limited medical coverage - coverage only if their injury resulted from an auto accident - is inconsistent with the reality of their financial predicament and is downright unfair.”
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Posted: Thursday, April 03, 2008 12:00:00 AM. Modified: Friday, April 04, 2008 11:00:19 AM.
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