Compulsory No-Fault Medical Insurance for Automobile Owners

The enactment of the Massachusetts compulsory no-fault insurance bill, and Senator Phillip Hart’s recent introduction of national no-fault insurance legislation, indicate the serious consideration no-fault insurance is receiving as a method of reforming the existing auto accident compensation system. The current tort system of recovery of auto accident medical expenses is inefficient, and, in many cases, does not adequately compensate the injured parties. Compulsory no-fault insurance is well suited to remedy these deficiencies. Under a no-fault insurance plan, benefits would be paid without regard to the question of fault; consequently, every accident victim would receive compensation without first having to establish his right to recovery through a costly and time-consuming tort suit. Because introduction of a no-fault insurance scheme designed to pay the full amount of every accident victim’s damages would be a bold step into an unfamiliar area, state legislatures have been unwilling to enact comprehensive no-fault plans. Instead, the legislatures have tended to initiate insurance reform by considering no-fault plans which provide only limited benefits. The Massachusetts compulsory no-fault insurance bill is such a limited plan. Although it provides coverage for several elements of auto accident damages including medical expenses, lost wages, and certain other out-of-pocket expenses, the bill requires a minimum liability coverage of only $2,000 per person. Accident victims with damages not reimbursed by the limited coverage legislation retain their capacity to sue in tort for those uncompensated losses. At least two auto insurance reform proposals assert that even more limited no-fault coverage is necessary to permit the most effective possible reform. One of these proposals is the Crossover Medical Payment Plan of the American Bar Association. ABA conference groups are now studying and formulating the specific provisions of the plan. The other proposal, the Conard-Skillern, has already been extensively developed. Both contend that no-fault insurance reform would produce the greatest benefits if the no-fault coverage included only medical and rehabilitation expenses. The rationale for this limitation is that the deficiencies of the tort system are most damaging in the area of medical expenses recovery, and limited insurance reform would therefore be most effective if the no-fault insurance concentrated its resources on the satisfaction of medical and rehabilitation claims. Since the Conard-Skillern proposal has been specifically formulated, this note will concentrate upon a description and comparison of the Massachusetts Act of 1970 and the no-fault medical insurance proposal of Conard-Skillern.