March 22--RIVIERA BEACH -- After a court injunction against one of his signature legislative initiatives, Gov. Rick Scott on Thursday defended attempts to fix Florida's auto insurance problems but said it was "appropriate" for legislators to consider options including ditching the no-fault system in place for more than four decades.
"The court made this decision," Scott told The Palm Beach Post in a visit to the Port of Palm Beach. "It's appropriate for the Legislature to look at other options. Let's see what the appeals court does. The big thing is, let's focus on keeping auto insurance as inexpensive as we can in this state."
One of the architects of the bill Scott fought to pass last year, Senate sponsor Joe Negron, R-Stuart, said now is an ideal moment to consider scrapping the state's Personal Injury Protection system and replacing it with mandatory bodily-injury liability coverage. Most Florida drivers have that coverage, according a state working-group report. Sen. David Simmons, R-Maitland, has floated the idea.
"The court's injunction is the very first decision in what will likely be a lengthy court battle," Negron said. "Now is the perfect time to consider Senator David Simmons' proposal to phase out PIP coverage in exchange for mandatory BI coverage."
The state's Office of Insurance Regulation filed an appeal Thursday after Leon County Circuit Judge Terry Lewis granted an injunction on parts of the law in a challenge filed by groups who say it unfairly shuts out certain medical providers. The judge said the injunction applies to portions of the law requiring the finding of an emergency medical condition within 14 days as a prerequisite for payment of full PIP benefits and banning payment for certain providers such as acupuncturists and massage therapists.
"This appeal will act as a stay of the injunction order until the 1st District Court of Appeal rules on this matter," said state insurance office spokeswoman Amy Bogner.
Florida requires a driver to carry $10,000 in PIP coverage to cover his own medical costs, even if he is at fault.
The 2013 overhaul says to qualify for the full $10,000 benefit, treatment must begin within 14 days for an emergency medical condition. Non-emergency benefits are capped at $2,500.
The Post reported last year that Colorado drivers saved 35 percent on their overall auto insurance bills after it became the latest state to drop a no-fault system in 2003. That included a slight rise in bodily injury liability premiums.
"I was pleasantly surprised it works," said Robert Ferm, who served as legislative counsel for the American Insurance Association, a trade group representing insurers in Colorado's debate. "It was not really the catastrophe that was anticipated."
The federal health care law upheld by the U.S. Supreme Court has undercut one of the major arguments for keeping PIP mandatory -- that it is necessary to ensure drivers have some basic medical coverage. In effect, the state law forces most Floridians to pay twice for medical insurance if they have private health coverage or a government plan like Medicare. The PIP portion of the auto insurance bill costs more than $2 billion a year, with Scott and others maintaining up to $1 billion of that is fraud and staged accidents. Only about 3 percent of PIP benefits are paid for lost wages.
A targeted 10 percent savings on Florida PIP premiums under the new state law by the start of 2013 wound up being closer to an average of 1 percent, records show. By 2014, insurers are supposed to reduce PIP rates 25 percent or explain to regulators why not.
On Thursday, Scott cited "positive" developments such as that PIP rates were down or flat for 70 percent of Florida insurers in a part of the bill where some rates had been going up 30 percent a year.
Scott was in town to highlight $26 million in investment at the Port of Palm Beach, which he said has helped the state's unemployment rate fall below the national average. He said additional steps, such as removing a sales tax on manufacturing equipment, can help "continue moving Florida's economy in the right direction."
Groups including the Florida Hospital Association have lobbied hard to keep the PIP system. Hospitals are paid at 200 percent of the Medicare rate under the latest state law. A spokeswoman said the hospital group had no immediate comment.
At a Post insurance round table Wednesday, the leader of a group representing Florida-based car insurers expressed regret at the court ruling.
"We're very disappointed," said Charles Grimsley, chairman of the Florida Property and Casualty Association.
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