Articles Posted in Insurance Issues

Governor Kate Brown is considering whether or not to sign a bill improving protections for car drivers. The choice she faces is one between protecting consumers involved in Oregon car accidents and protecting the insurance industry.

The legislation, formally known as Senate Bill 411, is designed “to ensure that Oregon auto insurance consumers can actually use liability coverage they pay for every month,” according to a news release by the Oregon House Democratic Caucus. It closes a loophole in current law under which properly-insured drivers who suffer injuries at the hands of an underinsured motorist often find that “the at-fault driver’s insurance (a minimum of $25,000) is subtracted from the victim’s Underinsured Motorist Coverage – for a half-million Oregonians this means they’ll never be able to access the full coverage they’re paying for.”

According to the Oregon House majority’s news release, “SB 411 will allow injured motorists to add their uninsured motorist coverage on top of the at-fault driver’s liability coverage so injured consumers get the coverage they paid for. The bill also ensures that Personal Injury Protection policyholders are able to recover their total damages first, before the insurance company.”

We have all heard stories of medical price-gouging, but an investigation published earlier this week by the Tampa Bay Times shows that in Florida hospitals have taken the practice to a new level.

According to a lengthy investigation by the newspaper, a change in Florida law several years ago allowed hospitals to charge special fees for the use of trauma centers. The centers are specialized facilities within emergency rooms and hospitals have long argued that establishing and maintaining them incurs unique costs which the institutions ought to be able to pass along to patients and insurance companies. For such fees “a fair cost, according to the federal government’s Medicare program, is just under $1000.” According to the newspaper, however, because the fees are not regulated “the average fee today tops $10,000; the most expensive hospital regularly charges $33,000.”

To be clear: these fees are in no way related to actual services rendered. They are, as the newspaper puts it, a “cover charge.” The paper recounts numerous instances in which patients “were charged more in trauma fees than for their actual medical care.” Since the fees are both unregulated and unrelated to the actual medical services a patient receives, the hospitals have an obvious incentive both to raise the fees as much as they can and to admit patients to the trauma center regardless of whether or not they actually need to be there. In one particularly shocking case, “an uninsured woman… was charged $33,000 even though she only needed someone to treat superficial cuts.”

We all know that lobbyists carry a lot of weight in Washington, Salem and other state capitals nationwide, but the lack of political will currently on display in Salem is especially hard to watch.

At issue is House Bill 3160. According to a recent article in The Oregonian, this modification to Oregon’s Unlawful Trade Practices Act would allow “Oregonians to sue companies for not paying claims promptly, denying coverage for losses or medical bills, and other reasons.” It would, in short, end the inexcusable exemption the insurance industry has long enjoyed from public accountability for its worst excesses.

The newspaper notes that “unlike similar laws in other states, House Bill 3160 would also allow third-party defendants to sue. For instance, an auto body shop would be able to sue a customer’s car insurance company even if it wasn’t the policyholder.” Put another way: by allowing third parties who have been wronged by insurers to sue the legislation would make it harder for large insurance companies to push ordinary Oregonians around. Protections like these are absolutely necessary after the many, many excesses of the insurance industry. The Oregonian notes that similar legislation was passed at the federal level in 2007, though that law specifically exempts health insurance companies.

A bill currently pending before Oregon’s legislature seeks to give consumers new protections and close a significant legal loophole. As reported recently by the Salem Statesman-Journal, both houses of the Oregon legislature are considering legislation that would end the insurance industry’s exemption from Oregon’s Unlawful Trade Practices Act. This important legislation promises important new protections for Oregon consumers by holding insurance companies accountable for the damage they do when they delay, or refuse, payment on legitimate claims.

As detailed by The Lund Report, a health policy blog, the legislation (HB 3160 and SB 686) will “allow consumers to recover economic and non-economic damages in court when insurers commit unlawful insurance practices.” Put another way, it will allow ordinary Oregonians to level the playing field against companies that refuse to play by the rules.

As the Statesman-Journal reports under existing law, insurance companies are not covered by the Unlawful Trade Practices Act. That exemption, in practice, allows them to mistreat customers by denying them the coverage they have paid for. The Lund Report quotes one of the bills’ sponsors, Sen. Chip Shields (D) of Portland, noting that “insurance is the only business that is exempt from this law.” That exemption makes it much easier or insurance companies to put their own financial interests ahead of the health and welfare of ordinary Oregonians.

A case that reached a resolution last week in Maryland offers a cautionary tale about dealing with insurance companies, as well as a lesson in the important role media sometimes play in helping victims obtain justice.

According to both Yahoo! News and CNN the story begins in June 2010 when a 24-year-old Maryland woman died in a car accident caused by another driver’s failure to stop at a red light. The driver who caused the crash was either uninsured or underinsured (media accounts vary on this point), but that ought not to have been a problem, since the victim carried uninsured motorist’s coverage as part of her auto insurance package with Progressive, one of the country’s best known car insurance companies.

Under Maryland law a trial was required to establish responsibility for the crash. To the fury of the victim’s family, Progressive’s attorneys helped the driver who caused the crash throughout the proceeding in an effort to establish that the victim was partly at fault – a circumstance that would have allowed the company to refuse to pay on its policy. The company has issued a statement pointing out that it did not formally represent the defendant, but the victim’s brother, quoted by Yahoo! News, said that the insurer’s lawyers repeatedly conferred with and assisted the defendant during the trial. They also made a closing statement claiming that his sister was at fault for the accident. “I am comfortable characterizing this as a legal defense,” he wrote last week, according to Yahoo! News.

50 SW Pine St 3rd Floor Portland, OR 97204 Telephone: (503) 226-3844 Fax: (503) 943-6670 Email: matthew@mdkaplanlaw.com
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