No-fault Insurance Bills Introduced. Vote Expected This Week.
ACTION ALERT: The Michigan House of Representatives has passed House Bill 4397, which would reform the auto no-fault insurance system, hours after the Senate passed Senate Bill 1.
Send a message to your legislators asking that they vote NO.
The Senate’s version includes:
- the creation and establishment of an auto insurance fraud authority under the Michigan Department of State Police.
- the gradual phase out of Michigan’s unique 100 percent catastrophic claims system.
- the creation and implementation of choice for what level of personal injury protection (PIP) coverage drivers purchase, or the choice to not purchase PIP. The options would include: $50,000 of coverage with an additional $200,000 for emergency care; $250,000; or an opt-out for persons with health insurance.
- the establishment of a fee schedule for injuries resulting from an auto accident (this would determine the amount hospitals, physicians, and clinics are reimbursed) based on Michigan’s workers’ compensation fee schedule. Under the fee schedule, physicians will receive a reduction in fees paid.
It does not include mandatory rate reductions, nor does it eliminate discriminatory rate-setting practices.
House Bill 4397 includes:
- insurance customers would be allowed to choose from five tiers of personal injury protection (PIP) coverage with rate cuts as follows: 10 percent for the current unlimited coverage, 30 percent for a $500,000 cap, 60 percent for a $250,000 cap, 80 percent for a $50,000 cap, and 100 percent for opting out of PIP all together. The above rate cuts would be required to remain in place for five years, and any future ones would have to be approved by the Michigan Department of Insurance and Financial Services (DIFS) before taking effect.
- the allowance of DIFS to promulgate rules prohibiting non-driving factors it finds discriminatory (the bill itself does not address those factors).
- the establishment of a fee schedule for injuries resulting from an auto accident (this would determine the amount hospitals, physicians, and clinics are reimbursed) based on Michigan’s workers’ compensation fee schedule. Under the fee schedule, physicians will receive a reduction in fees paid.
- the Michigan Catastrophic Claims Association (MCCA) would be left as is, with drivers only paying a portion of the attendant fee to cover any shortfalls in the coverage fund. The MCCA would be required to spread the shortfalls out over at least 15 years.
Concern of what happens after the five-year rollback expires and the possibility of auto insurance companies increasing rates to make up for monies lost during that time.
The House bill will now go to the Senate, and if passed, sent for Gov. Gretchen Whitmer’s signature, who has stated she would veto this legislation.
House Bill 4397 – http://www.legislature.mi.gov/documents/2019-2020/billengrossed/House/pdf/2019-HEBH-4397.pdf
Senate Bill 1 – http://www.legislature.mi.gov/documents/2019-2020/billengrossed/Senate/pdf/2019-SEBS-0001.pdf