House Republicans are at again in the latest effort to effectively end Michigan’s no-fault system. Unfortunately, after two failed recent attempts, the latest effort is not much different than prior attempts.
Currently, the Michigan no-fault law has no cap on medical care. If you are injured in a car accident, the no-fault carrier responsible for paying no-fault benefits must pay all reasonable and customary medical charges related to treatment for the accident. This is a lifetime benefit. The bills proposed by House Republicans seek to end this, placing a $10 million cap on medical care.
The bills dramatically change the Michigan no-fault in other ways. Instead of medical providers receiving the reasonable and customary charge for their services, a fee schedule will be implemented – set at 125% of the current worker’s compensation rate. The worker’s comp fee schedule is extremely low and does not adequately reimburse medical providers.
The bills also provide a managed care option, presumably to place claimants who don’t have health insurance in less expensive medical networks. Currently, Michigan no-fault claimants with no health insurance can see any doctor or visit any hospital they want. The new insurance company backed bill seeks to end this.
Motorcyclists should also be aware. Under the proposed bill, operators or passengers of a motorcycle involved in a motor vehicle accident are only eligible for $250,000 in coverage. Currently, motorcyclists enjoy the same lifetime benefits as motor vehicle operators and passengers.
In addition, insurance companies are not required to provide coverage for products and services that are “not reasonably likely to result in meaningful and measureable and lasting improvement in the injured person’s functional status.” One can only imagine the myriad of ways insurance companies will use this sentence to deny coverage!
Perhaps most unsettling is a proposal to provide a $50,000 coverage option for low-income residents. Presumably this proposal is to make auto insurance more affordable to low-income families – particularly in Metro Detroit – but really this is just a backdoor move by insurance companies to implement “PIP choice”.
In reality, everyone who is eligble for this coverage option will “opt” for the $50,000 in PIP, not knowing the enormous benefits they are giving up. Although the insurance savings for choosing this option has not been disclosed, one can imagine it won’t be significant or guaranteed to last.
In return for giving up the most generous no-fault system in the United States, the proposals promise Michigan drivers a 10% savings on insurance premiums. Of course these guaranteed savings are only available for up to 2 years and don’t include a $25 tax that will be included to fund a Medicaid health claims funding shortfall created by these same legislators last term.
According to CPAN (Coalition Protecting Auto No-Fault), an industry group charged with protecting the present no-fault system, the bill only provides $7 per month in savings based on the state’s 2011 average premium.
Fortunately, the same groups that came out against these proposals in 2012 and again in 2013 have expressed their strong concerns with the newest proposals. In a rare showing of unity, both the Michigan Association for Justice (MAJ) and Michigan State Medical Society have already urged lawmakers to vote against the bill.
Jase Bolger, the Republican House Speaker and Governor Rick Snyder’s point person on Michigan no-fault reform, is calling this new bill a fair compromise and stated in a conference call last week with media the proposals address “every single concern” of the opposition.
Nothing could be further from the truth. These bills are simply an end around the failed attempts of prior legislative sessions and only highlight the true goal of Michigan insurance companies – destroying the Michigan no-fault law. Let’s hope these proposals die a quick death like the ones previously introduced by Representative Bolger and the Michigan Republican leadership.