No-fault talks
focus on cost shifting

House conferees say their plan
won't hurt business; Senate negotiators
aren't so sure

Star-Bulletin staff

House conferees say they are trying to allay Senate fears that the House's proposed auto insurance reform would burden employers by shifting costs to the private sector.

During a conference committee in the state Capitol last night, Consumer Protection and Commerce Chairman Ron Menor (D, Wheeler AFB-Mililani) said: "We have tried to make a significant number of accommodations to the Senate position in hopes of trying to reach a compromise."

House conferees offered to increase the amount of medical coverage required under their reform bill from $3,000 to $7,500.

Senate negotiators, though, said they are not convinced the higher figure is sufficient to prevent a cost shifting.

"But we will take a look at it," said Sen. Rosalyn Baker (D, West Maui-Molokai), co-chairwoman of the Senate Commerce, Consumer Protection and Information Technology Committee.

The next committee meeting was not scheduled.

This is the third year the House and Senate have debated the state's 24-year-old no-fault program, which has the second highest premiums in the nation.

The House, with the backing of the Cayetano administration, is hoping to replace it with a tort-based system where accident victims sue for damages.

Under its original proposal, drivers would have been required to carry $3,000 of medical coverage, with coverage beyond that shifting to the state's prepaid health-care system, largely paid for by Hawaii employers.

Menor said his latest proposal is justifiable since accident victims are paid an average of $7,000 to $8,000 for auto medical claims.

He also said an insurance commissioner analysis from last year indicates it would still allow lawmakers to reach a goal of a 20 percent to 35 percent decrease in premiums.

Drivers now are required to have $10,000 of medical coverage.

Menor also proposed establishing a consumer advocate within the state Insurance Division. A similar position within the state Public Utilities Commission saved consumers millions of dollars, and the dozen or so states with one have premiums about 20 percent lower than average, he said.

The position would not require general funds, and would be paid for by savings generated from the abolishment of a peer review process, agreed upon already by both the House and Senate, he said.