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Insurance reductions for accident victims to have 'devastating' impact

Reductions to accident benefits coming to Ontario this spring will have a “devastating” impact on people who suffer serious injuries in car crashes — leaving taxpayers to fund the difference, Toronto personal injury lawyer Dale Orlando tells AdvocateDaily.com.

“It’s really shifting the burden from the insurance industry, which is massively profitable, to the taxpayers in general,” says Orlando, a partner with McLeish Orlando LLP and past-president of the Ontario Trial Lawyers’ Association.

For accident victims suffering from catastrophic injuries, “the quality of their lives, their health and the treatment they receive will suffer greatly,” he says.

The effects of the changes to the Statutory Accident Benefits Schedule — aimed at reducing insurance premiums to Ontario drivers by a target of 15 per cent — are twofold, Orlando says. The changes are expected to come into effect June 1.

First of all, it will be more difficult for injuries to be deemed catastrophic. Secondly, people who ultimately receive that designation will have much less money available to them, he says.

Under the current system, someone who has a non-catastrophic injury can access up to $36,000 for attendant care and $50,000 for medical rehabilitation benefits, Orlando says.

The new system will reduce the total amount to from $86,000 to $65,000, he says.

People who have catastrophic injuries now have access to $1 million for rehabilitation and another $1 million for attendant care. But under the new regime, the benefits will be reduced to $1 million combined, he says.

“It’s essentially $1 million in funding being taken away from the people with the most devastating injuries you can imagine,” Orlando says, citing quadriplegics and those with serious brain injuries as examples. “These are people who will need care and attention and assistance for the rest of their lives. It’s going to have a devastating impact.”

The changes are part of an effort by the Ontario Liberal government to reduce insurance premiums by 15 per cent, but has not yet met that goal, the Canadian Press reports.

Premier Kathleen Wynne has called the target a “stretch goal,” after the latest data from the Financial Services Commission of Ontario (FSCO) showed rates decreased by an average of roughly seven per cent from 2013.

“They’re essentially delivering that premium reduction on the backs of people who suffer catastrophic injuries,” Orlando says. “That’s really the only way I can look at these changes.”

Orlando points to a study by two York University professors prepared for the Trial Lawyers’ Association that analyzed the profitability of the insurance industry. The study showed insurance companies had been overcharging in premiums to the extent of $840 million, he says. The study has been “largely ignored” by the government, he adds.

When it comes to patients with catastrophic injuries, Orlando says the accident benefits changes will make it more difficult for them to receive that designation.

The Glasgow Coma Scale, which Orlando says is a cost-effective and easy way to gauge the severity of someone’s unconsciousness as a result of a brain injury, will no longer be used, he says.

Instead, the definition will be tightened by using other criteria that will make it more difficult for someone with a serious head injury to receive the catastrophic designation.

As well, a new edition of the American Medical Association guide will be used to rate a mental/behavioural impairments, and medical experts have told Orlando the rating system is much more rigorous, likely resulting in a lower “whole person impairment score” than the previous edition.

Overall, the end result of the changes will mean more financial hardship for people who need it most after a debilitating accident, he says.

Patients will be forced to look to the OHIP system for assistance, but Orlando says it is limited in terms of what is available for attendant care and extensive rehabilitation aids and devices.

“People will have to figure out a way to get by with less,” he says.

Dale Orlando is leading a webinar on the impacts of changes to Ontario's Statutory Accident Benefits Schedule on May 10 at 9 a.m. To register, go to www.pialaw.ca.

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