Continuing to act on his pledge to improve California’s business climate and prevent expensive litigation and abuse by special interest groups, Gov. Arnold Schwarzenegger (R) has vetoed legislation sponsored by personal injury attorneys that would have increased the cost of insurance for all Californians, according to the American Insurance Association.
“Gov. Schwarzenneger is making good on his promise to protect California’s consumers from special interest legislation,” said Janine Gibford, AIA assistant vice president, western region. “This legislation was sponsored by the personal injury attorneys and was designed purely to line their pockets with more money at the expense of California policyholders.”
The measure, SB 494 authored by Sen. Martha Escutia (D), would have given medical providers a direct right of action against insurers for the “reasonable and necessary” costs incurred for medical treatment provided for an injury caused by a third party, when the injured person was a Medi-Cal recipient.
“This measure was touted as a way to help public hospitals that are struggling to keep up with rising costs and low reimbursements. In reality, SB 494 was a cash grab by personal injury attorneys looking to increase the amount of money they can sue for,” Gibford said. “This bill would not have given injured people a penny more, but it would have been a windfall for lawyers.
“Reforms to the workers’ compensation system recently approved by Gov. Schwarzenegger eliminated a similar abuse, and this veto of SB 494 assures that this manipulative practice is not exported to other insurance markets.”
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