Michigan Home Republicans are planning a vote, maybe as early as at this time – however I’ve simply heard it’s extra more likely to happen tomorrow – on new No-Fault reform laws in lame duck. It’s anticipated that lawmakers within the Michigan Home of Representatives’ Insurance coverage Committee will introduce a substitute invoice for the No-Fault reform plan contained in Senate Bill 1014, which had been gathering mud because it handed the Senate earlier in June.
On the time, I denounced the proposals in SB 1014 – in addition to these in its companion invoice, Senate Bill 787 – explaining:
“The full Michigan Senate has passed two No-Fault bills – Senate Bill 787 and Senate Bill 1014 – which, if passed by the House and enacted into law, will substantially alter the rights and benefits guaranteed to car, truck and motorcycle accident victims.”
I worry the identical is true, however much more so, if Home Republicans get their approach now they usually’re capable of ram via this subsequent spherical of insurance-company sponsored No-Fault “reform” proposals onto an unsuspecting public within the lame duck legislative session.
Particularly, in response to a draft of the anticipated, 58-page “House Substitute for Senate Bill No. 1014,” that I simply completed reviewing, Home GOP lawmakers purpose to make these modifications to the Michigan No-Fault system:
- Capping No-Fault advantages: By no means ones to let a horrible, horrible, unpopular concept go by the wayside, the GOP is recycling the cornerstone of the failed Duggan-Theis-Leonard plan (Home Bill 5013)(which was emphatically rejected in a 63-45 Home vote) which is the $25,000 cap on all No-Fault insurance coverage advantages.
- Whereas a lot of the information media that’s reporting on this invoice calls this a $250,000 decrease cap on No-Fault advantages, that is clearly incorrect. For the overwhelming majority of people who find themselves significantly harm in automotive accidents, $25,000 is all that they may have obtainable to them for No-Fault PIP advantages. The remaining $225,000 is just for emergency room care, in a crass political effort to sway the highly effective hospital affiliation to help the laws.
- That $25,000 in PIP No-Fault advantages is meant solely as a “bridge” (Rep. Lana Theis’s phrases, not mine) from No-Fault insurance coverage to non-public medical insurance or to Medicaid and Medicare.
- Moreover, this draft invoice is massively punitive to harmless automotive accident damage victims if it seems that an harmless and severely injured automotive accident sufferer is UNABLE to sue the wrongdoer, negligent driver who causes the automotive crash for medical bills in “excess” of the $25,000 No-Fault cap. In different phrases, the harmless sufferer might be left to monetary devastation and chapter beneath the load of tons of of hundreds of dollars in medical payments, whereas the at-fault driver who brought on the crash will get full immunity and safety from the harms and medical payments that she or he prompted.
- There’s nonetheless the identical video games being performed on promised financial savings – as in, there aren’t any. The financial savings shall be momentary and unsure (with a built-in loophole for auto insurers). For what Michigan motorists will probably be giving up, this lack of ensures of financial savings is woefully insufficient, particularly in comparison with the huge income that auto insurance coverage corporations will take pleasure in by unloading most of their No-Fault legal responsibility onto Medicaid or Medicare.
- Even drivers who select to forfeit catastrophic damage protection by voluntarily agreeing to cap their No-Fault advantages will nonetheless should pay into the Michigan Catastrophic Claims Affiliation (MCCA).
- New and unprecedented restrictions on household offered attendant care. (Draft web page 40)
- Duping older drivers (62 years of age or older) into believing it’s protected to surrender all of their No-Fault advantages and going onto Medicare (regardless of its lack of ability to cowl the remedy and care that automotive crash victims want) in return for an indefinite assurance of a “reduced automobile insurance premium rate.” Once more, there isn’t a assure of financial savings. (Draft pages 40-42)
- 1 Dan Gilbert’s Grand Compromise on No-Fault Isn’t A lot of One
- 2 Changing catastrophic damage protection with caps on No-Fault advantages
- 3 Promise of financial savings? Not a assure of financial savings which you could take to the financial institution
- 4 Nonetheless paying the Michigan Catastrophic Claims Affiliation
- 5 No-Fault medical-provider payment schedule
Dan Gilbert’s Grand Compromise on No-Fault Isn’t A lot of One
The invoice is being delivered to a vote in lame duck largely by means of the efforts of Dan Gilbert, who senses that Republicans in lame duck could be extra prepared to take a vote on a invoice that closely favors the insurance coverage corporations over individuals.
However, on the brilliant aspect, the draft invoice is predicted to outlaw insurers’ use of non-driving-related elements resembling intercourse, occupation, schooling degree attained marital standing and credit score rating in setting auto insurance coverage costs. (Draft pages 6-Eight)
These are all issues that I’ve been writing about for the final a number of years on the pages of this auto regulation weblog.
Changing catastrophic damage protection with caps on No-Fault advantages
Probably the most vital and most damaging facet of the proposals within the draft substitute invoice for SB 1014 is its proposal to permit drivers to forfeit their catastrophic damage protection in return for No-Fault profit caps that may end in shifting their medical care and prices to non-public medical insurance, Medicaid and Medicare – or simply going with out vital care and remedy.
Listed here are the caps on No-Fault advantages (“coverage levels for the personal protection insurance benefits”) which might be anticipated to be proposed:
- $250,000 restrict ($225,000 for emergency room medical care and $25,000 “for all other personal protection insurance benefits,” i.e., medical bills, wage loss and alternative providers. (New MCL 500.3109B(1)(A))
- $250,000 restrict “on personal protection insurance benefits,” i.e., medical bills, wage loss and alternative providers. (New MCL 500.3109B(1)(B))
- $500,000 restrict “on personal protection insurance benefits,” i.e., medical bills, wage loss and alternative providers. (New MCL 500.3109B(1)(C))
- “No maximum limit . . . on personal protection insurance benefits,” i.e., medical bills, wage loss and alternative providers. (New MCL 500.3109B(1)(D))(Draft pages 37-38, 43)
Promise of financial savings? Not a assure of financial savings which you could take to the financial institution
Under are the proposed “savings” that drivers will obtain relying on what degree of No-Fault advantages they select:
- Common premium financial savings of 40% or larger for drivers who go for $25,000 cap on post-ER advantages.
- Common premium financial savings of 30% or larger for drivers who go for $250,000 cap on No-Fault advantages. (Presumably, regardless that it’s not said within the draft.)
- Common premium financial savings of 20% or larger for drivers who go for $500,000 cap.
- Common premium financial savings of 10% or larger for drivers who go for no cap.
Considerably, the financial savings are “guaranteed” for less than 5 years and auto insurers can squirm out of getting to offer financial savings they will persuade the Insurance coverage Commissioner that the “required reductions in premiums . . . are not justified.”
(Supply: Draft pages 55-56, 58)
Lest there be any confusion concerning the significance of the quantity of financial savings being promised, the financial savings to drivers must be thought-about in mild of what they’re giving up.
It additionally must be contrasted with the financial savings to auto insurers.
As an example, even when a driver saves 40%, she or he continues to be paying 60% of his or her present invoice, but she or he may have subsequent to no protection as a result of they are going to be restricted by the $25,000 post-ER cap on ALL No-Fault advantages (which suggests for the subsequent three years and past, all medical payments and wage loss and alternative providers should be paid for out of that $25,000 – which anybody and everybody is aware of is completely unimaginable).
Moreover, the inadequacy of the 40% in financial savings for drivers turns into clear when one realizes that the No-Fault cap that triggers these financial savings permits an auto insurer to jettison roughly 95% of its No-Fault legal responsibility for advantages (e.g., No-Fault protection legal responsibility dwindles from the $555,000 retention price right down to the measly $25,000 cap).
Nonetheless paying the Michigan Catastrophic Claims Affiliation
Though there shall be no extra catastrophic protection for drivers who go for No-Fault caps, they’ll proceed to should pay cash to the MCCA for that portion of the annual evaluation that’s “attributable to an adjustment for a deficiency in a previous period.” (Draft pages 26-27, 33-34, 36)
No-Fault medical-provider payment schedule
I’ve supported this concept for a very long time. Not solely will it do wonders when it comes to decreasing auto insurance coverage charges by decreasing No-Fault medical declare prices, however it should work miracles when it comes to eradicating the out-of-control fraud that’s rotting the No-Fault system from the within out.
Particularly, I’ve agreed with the proposal from CPAN that a charge schedule pegged at 185% of the Staff’ Compensation payment is perfect.
Though the proposed draft invoice to switch SB 1014 proposes a charge schedule, I consider it’s overly restrictive and unrealistically frugal.
Particularly, the draft invoice supplies that docs, hospitals, medical suppliers who deal with and look after automotive accident victims can’t be paid or reimbursed for “more than 100% of the amount for treatment, training, product, service or accommodation” underneath the Staff’ Compensation payment schedule.
Nevertheless, the payment schedule won’t apply to “trauma care” offered at a “Level I Trauma Care Center,” metropolis hospitals in some communities and “emergency medical services rendered by an ambulance operation.”
(Supply: Draft pages 38, 52-54)