When You Can’t Get Out of Bed with Your Insurer – Our current government’s “care not cash” proposal
The history of the Statutory Accident Benefits Schedule (SABS) can’t be recited here in detail but suffice to say that since its inception each government has once or multiple times made changes to the SABS.
Most of the SABS changes are made at the behest of the powerful insurance lobby with the effect of making more profit for the insurance companies. This purpose is not stated overtly but rather is couched in the terms of reducing premiums for drivers. Quite clearly what happens though is that coverages are reduced, therefore claim costs are reduced for the insurers, but the premiums never come down. When claims costs go down and premiums stay the same that means insurers make more money.
Our current government has put together two principal proposals – one is very good and reverses a mistake made by the previous government, and the other is highly questionable and is likely to be a new mistake all unto itself.
The first proposal is to restore the default Catastrophic Impairment limits to $2 million whereas the previous government had reduced it to $1 million which left most seriously injured individuals woefully underinsured. Restoring the limits to $2 million is the responsible and right thing to do and I commend the government for this proposal.
The second proposal is the “care not cash” proposal. This proposal would prevent insured people from negotiating lump sum settlements with their SABS insurers unless they had purchased a rider allowing them that right at the outset. The government knows full well that the statistics show that the optional purchasing rate in the province is less than 2%, if it’s even that high. The likelihood of people even knowing of the right to purchase optional benefits is so minuscule as to be non-existent.
What’s the problem with not being able to settle your statutory accident benefits entitlement for a lump sum? The problem is that you can’t get out of bed with your insurer.
I just received a benefits statement from one of my clients, literally 5 minutes before I wrote this. That client was entitled to statutory accident benefits in the amount of $50,000 for medical rehabilitation at the time that they got in their accident. The benefits statement shows that they have spent $49,220.89 out of their limits in trying to recover from their serious car accident. This was a man who was stopped with his left-hand turn signal on, with both feet planted on the ground while riding his motorcycle waiting to make a left-hand turn when he was hit from behind by an Audi going 70 km/hour. The Audi was totalled in the accident. The astonishing part is not that this man has survived, or worked so hard to try and put his life and his body back on track, or that it is has been so expensive to do so. The astonishing part is that on that statement of benefits it reveals that the cost of insurer’s examinations to date has been $35,042.02. This means that the insurance company has
spent over $35,000 sending this man to be assessed by health professionals, not for the purpose of providing him health advice or healthcare, but for the purpose of challenging his entitlement to healthcare to see whether or not he actually needs the care he is receiving or not. Some of these assessments have been performed for the express purpose of trying to deny him healthcare so that the insurance company can build their case to deny his coverage. Think about that for a minute, this man has lifelong injuries that will never go away and the insurance company has spent $35,0000 trying to fight his entitlement to medical coverage that he and his family paid the premiums for- $35,000 has been paid to doctors to write reports about how this man is not hurt.
The “care not cash” proposal is ill-founded and misses the forest for the trees. Not only will none of these proposals reduce premiums for consumers, but they will not streamline the care process for injured claimants. The fact is that sometimes when insurers start denying treatment and start spending tens of thousands of dollars on insurer’s examinations that the most logical thing for a person to do is to get out of bed with their insurer.
If you have $40,000 left in medical coverage and your lawyer tells you that your insurance company is about to put you through the ringer for the next three years, it probably makes a lot more sense to take a lump sum of $30,000 and then direct your own treatment by getting out of bed with your insurer. Just like insurance companies pool risk and regulate their companies on a macro scale, so do our governments legislate using this wide lens. If any of these people want to come speak to me or any of my clients about the individuals behind these cases and the way that the insurer behaves and the way that these coverages affect families, I would be pleased to do so. With a little bit more personalized understanding of these matters, I can ensure you that no responsible government would want to put forward this ill-conceived legislation.
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