Hospitals Ask Governor Crist to Address State Budget Impacts of No-Fault’s Sunset

TALLAHASSEE, Fla., Sept. 5 /PRNewswire-USNewswire/ — Editor’s note:

Today, the Florida Hospital Association (FHA) and the Safety Net Hospital Alliance of Florida (SNHAF) delivered a letter to Governor Charlie Crist warning that the expiration of no-fault auto insurance has a direct impact on the state budget and, therefore, must be considered in the special session.

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 healthcare* The Florida Department of Highway Safety and Motor Vehicles

FHA and SNHAF are leading the Coalition to Protect Florida’s Drivers, which is urging Governor Crist 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. A copy of the letter to Governor Crist follows.

HAND DELIVEREDSeptember 5, 2007The Honorable Charlie Crist

As the Florida Legislature begins the difficult chore of reducing the state budget to meet Florida’s revenue shortfall, the Florida Hospital Association (FHA) and the Coalition to Protect Florida’s Drivers recommend that consideration be given to the impact of the repeal of no-fault auto insurance on the state’s budget. Some have argued that no-fault auto insurance is not a budget issue and should, therefore, not be included in the upcoming special session. We would argue, in fact, that a no-fault expiration has significant budget consequences that must be considered by the Legislature to responsibly balance the state budget.

The state program and/or department budgets directly impacted by a sunset of no-fault auto insurance are outlined below:

Medicaid: Today, PIP 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. 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.

Court Costs: 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. 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. Additionally, considerations related to Article V should be addressed if those additional costs are to be shifted to the state’s counties.

Law Enforcement: 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.

Chapter 185 Pensions: 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.

State Health Insurance Program: Blue Cross and Blue Shield of Florida provided an estimate to the Department of Management Services (DMS) of 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 for a family of four annually.

Impact on Children’s Healthcare: 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.

Department of Highway Safety and Motor Vehicles: 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. With Property Damage liability 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.

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. 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.

Sincerely,Wayne NeSmithPresidentFlorida Hospital Association/s/Tony CarvalhoPresidentSafety Net Hospital Alliance of FloridaWN:rrcc: The Honorable Ken Pruitt, Senate PresidentThe Honorable Marco Rubio, House SpeakerFHA Membership

Florida Hospital Association; Safety Net Hospital Alliance of Florida

CONTACT: Rich Rasmussen, Vice President for Strategic Communications ofFlorida Hospital Association, +1-850-222-9800, rich@fha.org; or Tony Carvalho,President of Safety Net Hospital Alliance of Florida, +1-850-201-2096,tony@fsthc.com