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NU Online News Service, Sept. 24, 3:50 p.m. EDT
WASHINGTON—Property and casualty insurance trade groups are uniting to oppose a proposed Senate health care reform amendment to merge medical components of workers’ compensation and auto insurance with health insurance.
The provision, known in industry parlance as “24-hour health coverage,” was proposed yesterday by Sen. Jay Rockefeller, D-W.Va.
In a letter to the Senate Finance Committee, which was not expected to take up the amendment today, the p&c industry argues that, “the amendment would upend the systems now in place to protect injured workers, drivers and passengers.”
The insurers added that the 24-hour coverage concept “would destroy the healthy and competitive auto insurance marketplace.”
According to a lobbyist for the American Insurance Association, the amendment is not likely to be taken up by the committee, although it has been officially filed.
In a bulletin to members, the Independent Insurance Agents and Brokers of America said the work on language in the legislation in the Senate panel was supposed to be completed this week, but “the markup could very well slip into next week and potentially beyond.”
Committee members submitted 564 amendments to the bill, making it very difficult to squeeze the work on the bill’s language into one week, the agents’ bulletin said.
The letter said that the premiums charged for this coverage are highly risk based, meaning that the pricing creates a very strong financial incentive to avoid engaging in dangerous behavior such as drunk driving and violating safety laws, so the auto insurance system works to prevent accidents, deaths, injuries and their related economic losses, including health care costs.
“Adding auto insurance medical coverage to the traditional health insurance system would not solve the many challenges already facing that system, including the need to reduce costs,” said the letter.
In addition, the letter noted, auto insurers have developed and implemented sophisticated anti-fraud programs that effectively prevent fraudulent payments under auto insurance coverages.
“These very successful anti-fraud measures would be lost if auto insurance medical benefits are integrated into health insurance,” the letter added.
The industry’s stated opposition was contained in a letter delivered today to all members of the Senate Finance Committee.
It was signed by the American Insurance Association; the Council of Insurance Agents and Brokers; the Independent Insurance Agents and Brokers of America; the National Association of Health Underwriters; the National Association of Mutual Insurance Companies; and the Property Casualty Insurers Association of America.
In its letter, the p&c industry argued that health insurance reform “is already a major legislative undertaking,” and integration of the medical components of workers’ compensation and auto insurance is a very complex issue in its own right.
Moreover, the letter said, the matter has not been the subject of hearings in the Finance Committee or any congressional committee.
“In light of the serious damage it would do to our nation’s workers’ compensation and auto insurance systems, we respectfully urge the Finance Committee not to add the Rockefeller Amendment to the pending bill,” the letter added.
The concept of “24-hour coverage,” said the letter, was looked at in the 1970’s and again in the early 1990’s and not pursued.
“Among other factors, implementation would be extremely difficult,” the letter said, adding that, in addition, several states experimented with pilot projects (California, Kentucky, and Oregon) that were not successful.