Leave the Driving to Bill

When special interests collide over auto insurance, consumers feel their pain.

It isn't that the governor of Colorado hates you soccer moms out there. He just thinks you people shouldn't have the right, when some drunk driver plows into the family Aerostar, to dun your hardworking, premium-gouging insurance company for your medical expenses andstill be able to go after the blotto SOB in court for ruining your life.

That's basically what Bill Owens told a group of insurance-industry lobbyists in a private meeting last May. Unhappy that no major overhaul of Colorado's no-fault insurance system had been achieved in the 2002 legislative session, he vowed to "fix" the system this year or scrap it altogether.

"The Governor will support only real reform," one attendee of that meeting reported in an e-mail recently obtained by Westword. "He is unwilling to continue any kind of dual system in which accident victims receive both [personal injury] benefits and the right to sue."

The state's thirty-year-old no-fault system, in which medical benefits are paid by accident victims' own insurance companies regardless of who caused the collision, was up for sunset review last year. But Owens decided to extend it in order to assemble an industry-driven campaign that would either radically alter the existing law or prepare the public for its elimination.

"The Governor said he is unwilling to terminate no-fault this year," the lobbyist reported. "He thinks it would come as a great surprise to the public and the media. He wants to lay some solid groundwork for its termination next year."

Over the past ten months, the groundwork has been laid -- and how. Documents obtained through public-records requests and other sources detail how Owens and the lobbyists put their plan into action, launching a media blitz designed to convince policyholders that the no-fault system is "broken"; shmoozing editorial boards and extracting enthusiastic endorsements from the cheerleading Denver dailies; enlisting aid from health-care interests eager to salvage at least some remnants of the no-fault system; and staging an end-run around opponents of the effort, including the Colorado Trial Lawyers Association (CTLA) and consumer groups.

The result is House Bill 1225, a proposal that preserves some aspects of current medical benefits but severely limits the right of auto-accident victims to sue for damages. Sponsored by Greeley Republican Tambor Williams, the bill came roaring out of committee but now faces shaky prospects on the House floor; rattled by the overreaching quality of Owens's blitzkrieg, lawmakers have begun to entertain less draconian proposals.

Presented by supporters as a consumer-friendly piece of legislation that would lower premiums and offer more choice in types of coverage, HB 1225 has also been attacked as one of the most brazenly anti-consumer pieces of legislation to emerge from the Statehouse in years. Critics say the measure will do little to reduce rates while making it much tougher for accident victims to collect benefits or have their day in court.

"I call it the Drunk Driver Relief Act," says Dave Diepenbrock, director of legislative services for the CTLA. "There are sections of the bill that make no public-policy sense whatsoever."

Sponsor Williams says the bill is intended to bring down Colorado's soaring auto-insurance costs -- which, depending on whose data you believe, now ranks as the eighth, eleventh or thirteenth highest in the country. The state requires drivers to carry $130,000 in personal injury protection (PIP) benefits, the third-highest package in the country, but it also allows drivers to sue at-fault parties for pain and suffering after they incur only $2,500 in medical costs. Despite hefty premium increases, insurance companies have been taking a bath on PIP payments in recent years. They also maintain that the threshold for filing lawsuits is too low.

"Right now, to sue someone, you just need a trip to the emergency room and a CAT scan to reach the threshold," Williams says. "It's not a true no-fault system."

The proposal was hammered out by a "working group" of insurance and health-care industry representatives last fall. According to one informational pamphlet on the effort, deliberately excluded from the discussions were "groups which were deemed not interested in fundamental reform," such as the CTLA and the Colorado Chiropractic Association (many chiropractors derive a substantial portion of their livelihood from PIP payments).

The bill was then championed by Williams, whose district includes hundreds of employees of a State Farm Insurance regional headquarters and other pro-industry constituents -- including her husband, independent insurance broker Jim Eckersley. (Williams denies any conflict of interest: "My husband does not sell auto insurance, and we do not commingle assets.") It passed through Williams's House Business Affairs and Labor committee -- one of two "supercommittees" in the House, in which Republicans are overrepresented in comparison to the GOP majority in that body -- by an 8-5 margin. But the bill's journey hasn't been all open highway. After Attorney General Ken Salazar pointed out that HB 1225 would exempt auto insurers from the state's consumer protection act, Williams had to excise that provision, and Owens reportedly had to do some "woodshedding" of a couple of reluctant committee members to get it to the floor.

Denver's dailies have embraced the bill, particularly its effort to curtail exotic forms of PIP benefits such as aromatherapy and hot tubs. The Supreme Court recently upheld one $900,000 damage award for denial of hot-tub benefits, but the anecdotal evidence about how such treatments are jacking up costs doesn't hold water. According to the working group's own actuarial study of what's driving PIP costs, treatments by "alternative" health professionals account for only 2.5 percent of the total. (Chiropractors, who successfully lobbied Williams's committee not to be excluded from PIP coverage, account for 9.2 percent.)

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