A measure that Washington County’s legislative delegation had proposed this session to help local volunteer fire and rescue companies would have been “a form of double taxation,” a top insurance association official said.
“The cost of responding to emergencies is a basic governmental function and it should already be paid for via taxes,” said Eric Goldberg, vice president of the mid-Atlantic region of the American Insurance Association.
“So when the emergency responders seek to collect (from an insurer), it’s viewed as double taxation,” Goldberg said in an interview.
But a local ambulance chief said insurance companies, whose opposition led to local lawmakers withdrawing their proposals, need to consider whether they have a responsibility to help support the quality of service that is expected.
“My question to the insurance companies is, since you got this one (legislation) squashed really quickly, are you going to reduce everyone else’s policies?” asked Morgan Boyd, chief of Boonsboro Ambulance & Rescue.
“No,” Boyd said, answering his own question.
“Unfortunately, (expectations) are everywhere. We want services and we expect somebody else to pay for them,” Boyd said. “And, sooner or later, somebody else does.”
A question of jurisdiction
Goldberg, whose Washington-based trade group represents about 300 companies that provide auto and other kinds of property and casualty insurance, said it’s enough that government supports emergency services.
Told that local fire companies such as Hancock’s are only partially supported — 53 percent of Hancock’s $326,284 expense in 2010, according to The Herald-Mail’s calculations — by Maryland and county government aid, Goldberg said that doesn’t make it right to shift a financial burden to motorists with insurance.
Goldberg said the biggest impact would be on Maryland residents, not people from out of state who drive through Maryland and are involved in accidents.
“The county only has jurisdiction to collect fees from drivers who are in-state,” he said.
Goldberg, who lives in Virginia, said he wouldn’t have to pay if he were driving through Maryland “and I get in an accident and an ambulance has to come and the fire department. And the next thing I know, I get a bill for a couple hundred dollars at my home in Virginia. And I tear up the bill because you don’t have jurisdiction over me. I don’t live in your state. I don’t pay your taxes. So, the net effect is, only Maryland drivers get billed.”
Asked about that, Terry Trovinger, chief financial officer at Hagerstown-based Community Rescue Service, said that’s not accurate as far as his experience at CRS.
“If he’s talking about ambulances, we do get paid from their auto insurance, no matter where they live,” Trovinger said. “But maybe it varies as to what the homeowners (insurance) versus auto insurance is going to pay.”
Goldberg said another argument against such legislation is it would affect drivers with insurance.
Firms that specialize in billing “tend to only send (claims) to insured drivers ... And that’s sending the wrong message,” Goldberg said. Plus, he said, it can lead to rate increases.
What a policy covers
Why wouldn’t an insurance company that is interested in reducing damage or injury claims arising from an accident want to reward the fire or EMS company that had, for instance, freed trapped motorists from a burning vehicle?
“You’re right that insurance companies are there to spread risk and pay for losses,” Goldberg said, “but an insurance company’s obligations are to provide coverage” as listed in each policy. If what the fire or EMS company does is covered, the insurer will pay, “but if it’s not, they’re not going to pay.
“A lot of these (insurance) companies are owned by stockholders ... It would be blatantly unfair (to stockholders) to pay a loss that’s not covered by the policy,” Goldberg said.
“So, yes, we are in the business of paying for loss and we do like it when the accident doesn’t happen, but that doesn’t justify shifting the cost from the government over to the shareholders,” he said.
Asked about such arguments, Del. Kevin Kelly, D-Allegany, said he’s not an insurance expert, but from hearing insurance representatives at legislative hearings, “I think a lot of what they say is nonsense.”
Kelly sponsored legislation last year that became law and now requires health insurers to pay any ambulance bills their policies cover — directly to the ambulance company.
Insurance representatives “were the group who sent in a sacrificial lamb last year” at hearings on his legislation, Kelly said.
“They used somewhat the same ludicrous arguments (as against Washington County’s legislation this year), but the difference was, we had the ability for EMS companies to bill for a medical response,” Kelly said.