Due to California’s price controls, insurers must fight hard to be competitive in the market place by keeping costs low for consumers, and seeking innovative ways to further lower rates. PIFC also works hard against state laws designed to increase insurance costs unnecessarily. PIFC opposes legislation and lawsuits that enrich plaintiffs’ attorneys and makes customers needlessly pay more for their insurance coverage.
Howell v. Hamilton Meats, In August, 2011, the California Supreme Court denied a trial lawyer’s attempt to recover phantom medical costs never actually suffered by his client. The lawsuit sought to recover the amount of a medical bill ($190,000) from an at-fault driver even though the injured plaintiff’s health plan was able to get most of the bill waived ($130,000) under its agreement with the doctors. Instead of seeking $60,000 in damages (of which the health insurer paid almost all), the trial lawyer sought the entire $190,000 that was “billed.” The Supreme Court rejected the plaintiff’s request for this money that was never actually lost. PIFC filed a brief with the Supreme Court urging this outcome.
Medi-Cal Lien Legislation, PIFC successfully fought legislation sponsored by the trial lawyer association, Consumer Attorneys of California, which would increase the cost of auto and home insurance. In 2004 (SB 494/Escutia), 2005 (SB 399/Escutia), and 2007 (SB 84/Laird), the trial lawyers attempted to pass legislation allowing the injured party whose medical bills were paid in full through the Medi-Cal system to sue an at-fault defendant for the much higher “billed” amount presented by a medical provider, and pocket the difference after Medi-Cal is reimbursed. PIFC successfully stopped these efforts through a combination of Governor vetoes and legislative fights.
Underinsured Motorist Legislation, PIFC successfully opposed legislation in 2011 (AB 1063/Bradford) that would eliminate the ability of consumers to purchase a basic level of “underinsured motorist” insurance, which is optional health insurance coverage when a driver is struck by an inadequately insured motorist. This legislation would have forced people to buy more insurance than they may want or could afford, and increased the likelihood that consumers drop this important optional coverage due to cost. For many drivers who are struggling economically, this inexpensive coverage may be the only type of private health insurance they have when involved in an auto crash, so reducing the number of people who can afford the coverage will only put more stress on the public health system to pay the medical bills of the uninsured.