As the Colorado legislature races toward a hoped-for May 2 adjournment, a quartet of bills affecting the insurance industry are just now getting their initial hearings.
Three of the measures are rival versions of what we’d call “son of no-fault auto insurance.” In our view, all three should be tabled because it is too late to give such complicated issues the full public debate they need.
The fourth measure, House Bill 1389 by Rep. Morgan Carroll, D-Aurora, is different. It’s a bad idea that we would oppose whenever it was introduced.
Carroll’s bill would give the state insurance commissioner the power to reject rate increases for health and automobile insurance. Substituting the pricing judgments of government bureaucrats for free-market competition is almost always a bad idea.
Anyone who really believes in government price setting should recall the woeful results of former President Richard Nixon’s 1971-72 experiment with peacetime wage and price controls. If politicians think health insurance costs too much, they might try stripping out some of the expensive, mandated coverages that they’ve set in the law over the years.
The no-fault trio — Senate Bill 2112 by Sen. Lois Tochtrop, D-Thornton; Senate Bill 11 by Sen. John Morse, D-Colorado Springs; and House Bill 1009 by Rep. Mike Massey, R-Poncha Springs — are more soundly rooted in reality.
Each attempts to solve a problem that developed after Colorado scrapped its old no-fault auto insurance law in 2003 in favor of a tort system, which attempts to collect damages from the guilty party.
The tort system has reduced auto insurance premiums, but health insurers maintain it has shifted costs onto their shoulders that used to be borne by auto insurers, leading to an offsetting rise in health insurance premiums.
In addition, the tort system has posed problems for ambulance services, emergency rooms and hospitals providing trauma care. Such “first responders” often don’t get paid for treating victims who are later found to have caused the accident in which they were injured.
Zeroing in on that latter problem, SB 211 would require drivers to carry a mandatory $25,000 no-fault-style medical payment policy on their car insurance. SB 11 and HB 11 would require $15,000 of trauma care coverage on all auto insurance policies — limited in both bills to the first episode of care.
Logically, there ought to be a point — say, $5,000 or $7,500 in coverage — where health insurers and auto insurers would both agree it’s cheaper to just pay for ambulances and trauma care on a no-fault basis rather than squander money on dueling lawsuits. But barring such an agreement in the next few days, this issue is simply too complicated to be hashed out in the waning days of the legislative session.
