**LEGISLATIVE UPDATE ON REPEAL OF ALCOHOL EXCLUSION LAWS**

DATE: AUGUST 22, 2005
TO: NCOIL EXECUTIVE COMMITTEE NCOIL HEALTH INSURANCE COMMITTEE
FROM:SUSAN NOLAN, NCOIL EXECUTIVE DIRECTOR
RE:UPDATE ON STATE REPEAL OF ALCOHOL EXCLUSION LAWS

This document will report to NCOIL legislators on

  • New York Governor Pataki’s August 16 veto of a limited repeal of the NY alcohol exclusion law
  • Other states’ action on their alcohol exclusion laws

Attached are

  • August 5NCOIL Letter to New York Governor Patakiurging repeal[2004831]
  • August 16 Best Wire articleRE NY, featuring NCOIL’s letter

STATE REPEAL PROGRESS

On August 16, NY Governor Pataki vetoed a limited repeal of the alcohol exclusion law as it applied to No Fault Automobile Insurance.

Governor Schwarzenegger of California vetoed a bill in July that would have repealed the alcohol exclusion law.

In June, Nevada and Rhode Island repealed the UPPL alcohol exclusion provision.

A similar bill in Texas was left pending in the Senate State Affairs Committee in May.

Washington, Maryland, North Carolina, Vermont, and Iowa have already repealed the UPPL alcohol exclusion provision.

Eight states (Colorado, Connecticut, Massachusetts, Michigan, New Mexico, New Hampshire, Utah, and Wisconsin) never adopted the original model.

BACKGROUND

The Uniform Accident and Sickness Policy Provision Law (UPPL) is a model law adopted by the National Association of Insurance Commissioners (NAIC) in 1947. The UPPL contains a provision that allows insurance carriers to exclude health insurance coverage for alcohol related injuries.

The provision reads,“Intoxicants and Narcotics - The insurer shall not be liable for any loss sustained or contracted in consequence of the insured’s being intoxicated or under the influence of any narcotic unless administered on the advice of a physician.”

41 states and the District of Columbia passed legislation containing similar language.

Following arguments from NCOIL and other interested parties, the NAIC amended the model in June 2001 to prohibit insurers from using patient alcohol or drug use for denial of a health insurance claim.

The provision still exists in 35 states and the District of Columbia.

ISSUES OF CONCERN

Though originally intended to discourage drinking and save money, the UPPL provision is claimed by proponents of repeal to have the opposite effect. Because it inadvertently causes doctors in trauma centers to not test for blood alcohol, proponents argue the UPPL provision results in

  • increased costs from unnecessary, expensive tests to evaluate patient impairment
  • lower rates of detection and treatment of drunk drivers leading to more repeat offenses
  • increased health insurance premiums from the associated costs

Please feel free to contact Erik Olson at 732-201-4133 should you have any questions or concerns. Thank you for your attention to this issue.