Colorado Regretting Auto Insurance Decision

No-fault auto insurance was eliminated four years ago in Colorado, and some say that it is the worst thing that could have happened to them. The switch from a no-fault car insurance state to a tort system has saved drivers a significant amount of money, but has cost the hospitals and trauma care providers millions of dollars in the process.

Auto insurance holders have saved roughly 32% on year on average not having to carry no-fault any longer, and 73% say that they don’t want to see it reinstated. However, hospitals have lost more than $80 million a year on collections, with a big part of that due to the switch. No-fault used to cover hospital bills for those that could not afford them. Now the hospitals are having to come after them for the money, but are unable to collect.

Some hospitals are finding that trauma care specialists are not even responding to some areas as they know they won’t get paid for it. Many of the ambulance companies are saying that they are only getting back roughly 30% of what they are earning. It has become an absolute financial mess for the health care industry.

Lawmakers are aware of the problem and many are looking into alternatives to fix it. There is one bill that would require auto insurance holders to buy additional insurance to cover their medical bills, and another that would add $16 to car registrations for a trauma fund. However, as of yet, there has been no general consensus for what should be done, and how the problem will be solved.

They say that one of the biggest problems is that they are forced to charge those than can pay higher amounts, so they are in effect paying for those who don’t. They say that this is not fair to those that are paying their bills, and if it keeps up like this they are going to start seeing hospitals, etc. needing to close their doors.


Back to November 2007 Archives