• FAIR – supporting auto accident victims through advocacy and education
  • FAIR – supporting auto accident victims through advocacy and education
  • FAIR – supporting auto accident victims through advocacy and education
  • FAIR – supporting auto accident victims through advocacy and education

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Putting the pieces together – what Ont auto insurers don’t pay and how it is creating a crisis

Insurers are pocketing the health care costs of treating MVA victims – funds that should be repaid to taxpayers (not to mention OW and ODSP costs that the taxpayer is unknowingly picking up along with prescription costs) and this has created a health care $ deficit problem for Ontario taxpayers. A problem the Financial Services Commission has known about for years – the Auditor General told the FSCO it needed fixing in 2011 but nothing was done so the taxpayer has continually paid some of the medical costs of MVA victims. To ‘cure’ the problem it is now suggested by the Ontario Chamber of Commerce to privatize some services. Which means more people would have to increase their private insurer coverage if they are lucky enough to have this extra coverage. Who benefits? Not the taxpayer and not victims. Insurers who will now sell consumers the coverage they can no longer get from OHIP. Simultaneously auto insurance coverage (as of June 1, 2016) is decreased by over $1 million for the most catastrophically injured among us, thereby saving insurers about $6-800 million a year in payouts. Rehabilitation/medical rehab access is also cut by 5 years for all but children who are injured. http://truthaboutinsurance.ca/benefits-recently-cut-further/ . So just as MVA victims are about to be increasingly shunted onto the OHIP system, the proposal is to increase the privatization of that system.

From the 2011 Annual Report of the Office of the Auditor General of Ontario http://www.auditor.on.ca/en/content/annualreports/arreports/en11/301en11.pdf – see page 65   In 2005, our audit of the recovery of health costs resulting from accidents led us to conclude that the Ministries of Health and Finance did not have satisfactory policies and procedures in place to monitor the adequacy of the initial $80-million annual assessment. Subsequently, the government increased the annual assessment in September 2006 to about $142 million. () We compared Ontario’s assessment of healthsystem costs to those of other jurisdictions and found that Ontario’s is among the lowest in Canada when measured on a per-registered-vehicle basis, as illustrated in Figure 9. If Ontario’s assessment per registered vehicle were raised to the average of other provinces, the assessment would increase by 50%, or about $70 million, to $214 million. Assuming that the insurance industry was successful in passing this cost on to vehicle owners, this change would likely add almost $10 to the insurance premium for each vehicle in Ontario.  

From the HSPRN report: Conclusion We employed a robust and rigorous approach to estimating total health system costs associated with treatment in the Ontario health care system for motor vehicle accidents. The estimated attributable cost per MVA individual in the first year following a motor vehicle accident in 2011/12 was $3,134 and averaged $2,958 over seven years from 2007-2012 (expressed in 2013 CAD currency terms). Costs in subsequent years were considerably lower from the second year onwards and declined slowly over time. The present value of all estimated MVA attributable costs was $5,495. With a total of 69,724 incidents in 2013/14 this amounts to a total present value (net actuarial liability) of $383,099,805 for MVAs that occurred in 2013/14. HSPRN Report, “Cost of Public Health Services for Ontario Residents Injured as a Result of a Motor Vehicle Accident”

From the ONTARIO SOCIAL ASSISTANCE STATISTICS: Ontario Disability Support Program 325,351 cases and 449,861 recipients. “Cases” refer to the individuals and families who receive social assistance benefits. “Recipients” are the total number of people – cases and dependent family members – who benefit as a result of receiving social assistance. Canada Social Report Social Assistance Summaries, Ontario, 2015

From the Release/Analysis Chamber of Commerce Privatization Report Poorly Researched, Not in Public Interest: Health Coalition: The Ontario Chamber of Commerce report adheres to what has become the predictable formula of “create a crisis then privatize” used by the pro-privatization forces in Canada, virtually all of whom come from for-profit health care industry that wants more privatization to expand its own market share and profits.  http://www.ontariohealthcoalition.ca/index.php/release-chamber-of-commerce-privatization-report-poorly-researched-not-in-public-interest-health-coalition/

Transformation Through Value and Innovation: Revitalizing Health Care in Ontario Report http://www.occ.ca/wp-content/uploads/2013/05/HTI_March15.pdf

And who will profit? Insurers whose profits are already billions of dollars richer from overcharging consumers. Insurers will profit an additional $6-800 million/year from the reduction of coverage for catastrophic injuries in policies sold after June 1, 2016.

From the Ontario Trial Lawyers: THE TRUTH REVEALED ABOUT INSURANCE COMPANIES’ PROFITS IN ONTARIO: Dr. Fred Lazar and Dr. Eli Prisman, from the York University Schulich School of Business, conclude in a recent study that for the period of 2001 to 2013, consumers in Ontario have likely overpaid for auto insurance between $3 billion and $4 billion. This money has not gone to accident victims or to lower premiums for consumers – instead this money has gone straight to the insurance companies’ coffers. In 2010, deep cuts were made to auto insurance benefits payable to those injured in auto collisions. Those cuts resulted in $2 billion in costs savings for the auto insurers. A large percentage of this windfall to the insurers was the reduction of medical and rehabilitation benefits payable to injured auto accident in victims. The standard coverage was reduced from $100,000 to $50,000. But equally troubling was the introduction of the Minor Injury Guideline that in practice has seen medical and rehabilitation benefits slashed for almost 80% of injured victims from $100,000 to $3,500. http://truthaboutinsurance.ca/drs-lazar-prisman-report/

From the Lazar Prisman Report: Auto insurance companies in Ontario have had a relatively free ride during the past 20 years. Since the ROEs permitted by FSCO since 2001 exceeded the ROEs we estimated for the auto insurance industry, it is conceivable that premiums have been too high and as a result, consumers in Ontario have paid too much for auto insurance. The possible over-payments range as high as $685 million, with total over-payments of approximately $3.1 billion between 2001 and 2013. http://www.fairassociation.ca/wp-content/uploads/2015/06/Lazar-Prisman-report-033115-FINAL.pdf

 

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