No-Fault Law Under Attack
The Michigan legislature is making a last second run to dismantle the Michigan no-fault automobile law during the last week of this year’s tumultuous and controversial lame duck session.
The Michigan legislature has already passed a number of controversial bills this lame duck season. In fact, Governor Snyder may end up having more than 150 bills arrive at his desk for signature this week. One such bill could also include the gutting of the Michigan no-fault law.
The Michigan no-fault law has helped thousands of automobile accident victims since its inception in the 1970s. Yes, the cost of auto insurance is extremely high. And yes, something needs to be done about this. But the proposals that just popped up out of nowhere last week and are going to be voted on possibly tomorrow merely line the pockets of insurance companies while taking away benefits for the injured.
What’s In The Proposed Bill
The current House Bill does the following:
- PIP choice where people can select a total cap on benefits of $250,000, $500,000, or unlimited medical. Currently, every no-fault policy in Michigan provides for unlimited medical.
- A medical provider fee schedule that matches the current fee schedule for worker’s compensation cases. The worker’s comp fee schedule is very low and as a result, most doctors won’t touch a worker’s comp claimant. The rates are below Blue Cross Blue Shield of Michigan reimbursements. The current law does not have a fee schedule.
- Seniors can completely opt out of purchasing no-fault benefits beginning at age 62.
- Limitations in family provided attendant care (or personal care) to 84 hours per week. Currently, there is no limitation and catastrophically injured patients can select anybody they want to provide them with care, including their family members. This proposal takes that choice away.
- A fraud authority that will be run by the insurance industry.
Why the New Bill is Worse
This bill contains no guarantee of a rate reductions in the cost of auto insurance. None. In fact, the guidelines in the house bill are very weak. It also does little if anything to eliminate “red-lining”, which has greatly increased the cost of auto insurance in urban areas such as Detroit, Flint and Saginaw.
This bill also makes it likely that most doctors won’t want to touch an auto accident victim here in Michigan. The reimbursement rate is way too low and the time and cost involved in actually getting paid are too high. The fee schedule as written will act as complete barrier for care to those most in need.
Instead of acting as a way for doctors to receive prompt and fair payment for their services, this new law would do the exact opposite. This is bad for everybody involved.
The bill also doesn’t make required changes to third-party pain and suffering cases. For example, under current law, an injured person receives lost wages from the no-fault carrier for up to 3 years from the date of the accident. After that time, excess wages come from the at-fault driver’s or at-fault owner’s insurance company. But with this bill, benefits are capped. What happens to these wage loss claims where people still cannot work from the accident but their PIP cap was reached?
Also, what happens to seniors who opt out of no-fault entirely? Are they still required to meet a threshold injury as required MCL 500.3135 to get pain and suffering compensation? Since Medicare doesn’t pay for auto related treatment, their compensation for pain and suffering will go straight to paying for their medical bills. Is that something that the legislature understands in offering this proposal?
These proposals leave way too many unanswered questions. This is a multi-billion dollar decision this legislature is making, and it would serve the entire state of Michigan to leave this decision to the next legislative session where elected officials and stakeholders can work together to find a better solution for all parties involved.
We ask that the Michigan House votes no on this ill-conceived proposal so the citizens of Michigan can get something better in the future.