Colorado Senate OKs Requiring Car Insurers to Offer Medical Coverage

Colorado drivers would be nudged into buying medical coverage on their car insurance policies under a proposal backed by the state Senate on April 29.

Under the bill, insurance companies would have to include $5,000 in medical coverage in policies starting next year. Customers could reject the coverage but, if they don’t object, the coverage would remain in the policy. The Senate voted 26-9 to send the measure to the House.

The aim of the bill is to help support a trauma system that sponsor Sen. John Morse, D-Colorado Springs, said has been “fraying” because of Colorado’s tort car insurance system, in which the at-fault party pays for damage and injuries from car accidents.

Before the state switched from a no-fault system to the tort system in 2003, car insurance policies were required to include personal injury protection which paid for hospital and ambulance bills soon after an accident regardless of who was at fault. That coverage was blamed for Colorado’s high insurance rates.

Under the current tort system, hospitals and ambulances aren’t paid until insurance companies work out who was at fault. In addition, at-fault drivers without health insurance or with high deductibles sometimes are unable to pay their medical bills.

Morse, who spent 14 years working as a paramedic, said most people don’t have enough health insurance to cover medical bills from a car accident. He said unless ambulances and hospitals are able to get paid and receive those payments faster, the system won’t be equipped to handle all kinds of emergency medical calls, not just car accidents.

The insurance industry has fought periodic attempts to require more coverage since Colorado switched to the tort system but Carole Walker, executive director of the Rocky Mountain Insurance Information Association, said Morse’s amended bill at least give consumers the chance to opt out. She estimated that $5,000 in coverage would cost the average driver about $60 a year per vehicle depending on their history and insurance company.

“This is a more reasonable compromise to take care of the first responders,” she said.

Still, Walker said insurers are still concerned about another part of the bill would bar insurers from recovering the medical coverage they pay out if the other party is found to be at fault.