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Seat Belts

Estimated Minimum Savings to the Medicaid Budget by Implementing a Primary Seat Belt Law

Overview

A 2003 study estimated that if all States had primary laws from 1995 to 2002, over 12,000 lives would have been saved. Failure to implement a primary belt law creates a real cost to a State’s budget for Medicaid and other State medical expenditures. These studies estimate the minimum dollars expected to save on direct medical costs (primarily paid through Medicaid) by the implementation of a primary seat belt law.

Arkansas

In 2005, Arkansas’s seat belt use rate was 68.3 percent. Based on this conversion rate one would expect belt use to increase by 12.68 percent and of those newly belted individuals, at least 50 percent would avoid injury. In 2005, The Federal Government reimbursed Arkansas at 73.37 percent. Accounting for this reimbursement, the first year savings to the State by implementation of a primary seat belt law would be about $0.6 million. Arkansas could expect to have saved $4.2 million in the first 5 years and $11.1 million over 10 years.

Colorado

In 2006, Colorado’s seat belt use rate was 80.3%. Based on a 40 percent expected conversion rate, one would expect belt use to increase by 7.88%, and of those newly belted individuals at least 50% would avoid injury (based on seat belt effectiveness in reducing injury). However, the Federal Government reimburses States a portion of their Medicaid expenditures. The reimbursement rate for Colorado is 50.0%. Accounting for this reimbursement, the first-year savings to the State by implementation of a primary seat belt law would be about $1.2 million dollars. Colorado could expect to have saved $7.3 million in the first 5 years and $18.2million over 10 years.

Florida

In 2005, Florida’ seat belt use rate was 73.9%. Based on the conversion rate one would expect belt use to increase by 10.44% and of those newly belted individuals, at least 50% would avoid injury (based on seat belt effectiveness in reducing injury). The 2005 Federal Government reimbursement rate for Florida’s Medicaid expenditures was 58.76%. Accounting for this reimbursement, the first-year savings to the State by implementation of a primary seat belt law would be about $ 2.3 million dollars. By the fifth year, the savings would be $4.1 million for that year alone. Florida could expect to save $15.9 million in the first 5 years and $43.1 million over 10 years.

Massachusetts

Examines 2006 hospital discharge data reporting cases where the external cause of injury to a vehicle occupant was a motor vehicle crash to predict the estimated savings to Massachusetts if a primary seat belt law is implemented. The savings are calculated using costs based on the report Economic Impact of Motor Vehicle Crashes (DOT HS 809 446). In Massachusetts, there is an expectation of a primary law reducing the burdenof insurance companies by about $55.8 million from crashes occurring in a single year alone. The crash victims in Massachusetts would benefit by a reduction of more about $3.9 million while the Federal Government would also reduce its costs by about $3.9 million before reimbursing Massachusetts for a portion of Medicaid expenditures. Massachusetts would also reduce its spending by $5.7 million ($3.6 million after reimbursement).

Missouri

In 2005, Missouri’s belt use rate was 77.4%. Based on a 40% belt use conversion rate for implementing a primary law, belt use could be expected to increase by 9.04% in Missouri. The Federal government also reimburses a portion of States’ Medicaid expenditures and the 2005 reimbursement rate for Missouri was 61.6%. Accounting for this reimbursement, the first year after implementing a primary law Missouri could save $2.3 million. In terms of cumulative savings, over the next 10 years, Missouri can expect to save at least $46.8 million on their annual budget in medical costs alone by implementing a primary seat belt law in 2007.

Nevada

Examines 2007 hospital discharge data reporting cases where the external cause of injury to a vehicle occupant was a motor vehicle crash to predict the estimated savings to Nevada if a primary seat belt law is implemented. The savings are calculated using costs based on the report Economic Impact of Motor Vehicle Crashes (DOT HS 809 446). In Nevada, there is an expectation of a primary law reducing the burden of insurance companies by about $4.2 million from crashes occurring in a single year alone. The crash victims in Nevada would benefit by a reduction of more than $503,000 while the Federal Government would reduce its costs by about $543,000 before reimbursing Nevada for a portion of Medicaid expenditures. Nevada would also reduce its spending by $1.6 million ($930,000 after reimbursement).

New Hampshire

Examines 2005 hospital discharge data reporting cases where the external cause of injury to a vehicle occupant was a motor vehicle crash to predict the estimated savings the State of New Hampshire if a primary seat belt law is implemented. The savings are calculated using costs based on the report Economic Impact of Motor Vehicle Crashes (DOT HS 809-446). In New Hampshire, there is an expectation of a primary law reducing the burden of insurance companies by about $5.1 million from crashes occurring in a single year alone. The citizens of New Hampshire would benefit by a reduction of $1.2 million while the Federal Government would reduce its costs by $1.2 million. The State of New Hampshire would also reduce its spending by more than $400,000.

Rhode Island

Examines 2006 hospital discharge data reporting cases where the external cause of injury to a vehicle occupant was a motor vehicle crash to predict the estimated savings to Rhode Island if a primary seat belt law is implemented. The savings are calculated using costs based on the report Economic Impact of Motor Vehicle Crashes (DOT HS 809 446). In Rhode Island, there is an expectation of a primary law reducing the burdenof insurance companies by about $1.9 million from crashes occurring in a single year alone. The people of Rhode Island would benefit by a reduction of more than $397,000 while the Federal Government would reduce its costs by about $278,000 before reimbursing Rhode Island for a portion of Medicaid expenditures. Rhode Island would also reduce its spending by $553,000 ($374,000 after reimbursement).

Utah

Examines 2007 hospital discharge data reporting cases where the external cause of injury to a vehicle occupant was a motor vehicle crash to predict the estimated savings to Utah if a primary seat belt law is implemented. The savings are calculated using costs based on the report Economic Impact of Motor Vehicle Crashes (DOT HS 809 446). In Utah, there is an expectation of a primary law reducing the burden of insurance companies by about $11.0 million from crashes occurring in a single year alone The residents of Utah would benefit by a reduction of more than $376,000 while the Federal Government would reduce its costs by about $351,000 before reimbursing Utah for a portion of Medicaid expenditures. Utah would also reduce its spending by more than $614,000 ($180,000 after reimbursement).

Vermont

This report examines 2005 hospital discharge data reporting cases where the external cause of injury to a vehicle occupant was a motor vehicle crash to predict the estimated savings to the State of Vermont if a primary seat belt law is implemented. The savings are calculated using costs based on the report Economic Impact of Motor Vehicle Crashes (DOT HS 809 446). In Vermont, there is an expectation of a primary law reducing the burden of insurance companies by about $1.3 million from crashes occurring in a single year alone. The people of Vermont would benefit by a reduction of more than $130,000 while the Federal Government would reduce its costs by about $125,000 before reimbursing Vermont for a portion of Medicaid expenditures. Vermont would also reduce its spending by more than $498,000 ($248,000 after reimbursement).