Posted on Monday, March 16th, 2015 at 3:20 pm
Everyone knows how insurance works. You pay a monthly premium, and in return, your insurance company takes care of you if something bad happens. If, at the end of the year, you have no car wrecks, your car insurance company does not return the money you paid. Similarly, if you do not see a doctor throughout the year, your health insurance does not reimburse the premiums you spent. This is the risk we take when buying insurance: we may not need it. In contrast, if you are injured, your insurance company pays for your bills, even if they exceed the amount the company received from your payments. This is the risk it takes.
Arkansas House Bill 1907, recently proposed by Representative Micah Neal, changes everything you know about insurance. Let me give you an example of what this bill does. Let’s say you are involved in a car collision that causes you severe injuries. To treat these injuries, you incur medical bills, and your health insurance pays $25,000 on these bills. Unfortunately, the driver who hit you only carries $25,000 in liability insurance coverage. You settle with the negligent driver for the $25,000 because there is no other money to collect.
Under current Arkansas law, your health insurance does not receive money from your $25,000 settlement. Common sense says this is fair because the insurance company has already received payment from you in the form of your insurance premium. Therefore, the settlement you receive can go to pay for the harms you sustained because of the collision.
In contrast, under the proposed law, you do not receive a dime of the $25,000. Instead, you must use the entire $25,000 settlement to reimburse your health insurance for the bills it paid. Even though you pay your premium every month, the new law enables your health insurance company to double dip by collecting your monthly premium in addition to your entire $25,000 settlement. You read that correctly: you pay your monthly premium, and then you must pay your health insurance company again for doing what it agreed to do in the first place.
Even worse, if necessary, you must go to Court to help the health insurance company take your money away from you. While your insurance company is paid twice, you receive no money for your other medical bills, no money for your lost wages, and no money for your pain and suffering. Similarly, while completely eliminating the health insurance company’s risk, the law does not eliminate yours. Unfortunately, you do not receive reimbursement of your premium if you don’t use your insurance.
House Bill 1907 has a similar effect on car insurance. In short, House Bill 1907 is bad for Arkansans. If you believe the needs of real Arkansans are more important than the greed of giant insurance companies, contact your representative by phone or email, and let him or her know you oppose this bill. To find your representative go to arkansashouse.org,and enter your address in the “Find My Representative” box at the top of the screen.
