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My conversation with House Speaker Jase Bolger on his No Fault insurance "reform" plan

House Speaker Jase Bolger

I thought my running dialogue with Speaker Bolger last week might make for some interesting – and very insightful – reading.

First, by way of background, last week House Speaker Jase Bolger posted an editorial in The Detroit News regarding his proposed No Fault insurance “reform” plan.

I’ve been an outspoken critic, and I have said there are many problems with Bolger’s No Fault plan. The biggest problem in my eyes is that consumers will lose far more than they would gain , while the auto insurance companies will be laughing all the way to the bank.

I voiced several of these concerns in the comments to Speaker Bolger’s editorial. To my surprise, Speaker Bolger and his press secretary took the time to respond to my comments.  And then I responded.  And then they responded again.  And away we go.

There are many interesting highlights from our online conversation. But one that jumps out to me is that  Speaker Bolger isn’t even familiar with the No Fault law as it currently exists. For example, Speaker Bolger said that under our existing No Fault law in Michigan, auto accident victims do not have the right to a trial by jury regarding issues concerning the “reasonableness” of No Fault medical charges and whether their No Fault benefits were unjustly denied and/or terminated by an insurance company.   As an attorney who has taken many of these cases to verdict, just the opposite is true. Car accident victims currently do have a right to a trial by jury regarding these issues.

Speaker Bolger is the one who is actually proposing to strip away these guaranteed legal rights, rights guaranteed by our Constitution.

Here is the full dialogue:

Michigan Auto Law: The overall problem with Michigan House Speaker Jase Bolger’s plan for so-called No Fault “reform” is that Michigan auto insurance consumers stand to lose a lot more than they’ll gain from the proposed No Fault changes, while the reverse is true for auto insurance companies. 10% savings on auto insurance premiums for two years doesn’t add up to much for consumers, especially when you factor in the new Health Insurance Claims Assessment (HICA) tax (and assuming there are no hidden fees and assessments in the final, written plan as there were with last year’s plan for changing No Fault). Given that Michigan’s average annual premium is $1,100 (according to the National Association of Insurance Commissioners and the Insurance Institute of Michigan), the savings from Speaker Bolger’s plan work out to approximately $85 for each of two years. Contrast that with the enormous and permanent loss of No Fault benefits and protections (which translates into huge profits for auto insurers) resulting from the proposed cap on No Fault medical benefits, the proposed fee schedule on medical providers and the proposed restrictions on payments for attendant care services.

Jase: Michigan Auto Law, please define what you mean by “enormous and permanent loss of No Fault benefits and protections.” We are not changing the No Fault system at all. What we are addressing is disparity in medical charges and inefficiency in the system. We also are creating a $10 million cap that, while not unlimited, would cover 99.9% of claimants for all of their needs and is still 200 times higher than the next closest state (New York) which has a $50,000 cap.

Michigan Auto Law: Thank you very much Speaker Bolger for responding to Michigan Auto Law’s comment. By “enormous and permanent loss of No Fault benefits and protections,” we’re referring to your proposals for permanently eliminating: (1) No Fault’s existing and long standing guarantee of reasonably necessary and reasonably priced lifetime No Fault medical benefits; and, (2) auto accident victims’ expectation that their medical expenses and attendant care expenses will be covered and paid for by No Fault so long as the charges are reasonable (not whether they are in line with legislatively imposed restrictions). Because you have not released a written, detailed version of your plan, we don’t know if your plan will ultimately also include permanent No Fault losses similar to those in last year’s House Bill 4612: restrictions on rehabilitation, home modification and vehicle modification benefits; restrictions on auto accident victims’ ability to challenge auto insurers’ denials and terminations of No Fault benefits; and/or restrictions on auto accident victims’ right to a jury trial on the reasonableness of medical charges and whether No Fault benefits were unjustly denied and/or terminated. To your point about your proposed cap on No Fault medical benefits, we respectfully submit that New York is a perfect example of why No Fault medical caps won’t guarantee savings for auto insurance consumers. Despite having their No Fault medical benefits capped at levels far, far, far below what’s guaranteed by Michigan’s No Fault law, New York consumers pay more for auto insurance than do Michigan consumers. New York’s average auto insurance premium is $1,234, whereas Michigan’s is $1,100, according to data from the National Association of Insurance Commissioners and the Insurance Institute of Michigan.

Jase:  Michigan Auto Law, a draft of the bill is being prepared and I am researching the points you raised with the drafters to try to address them for you. In the meantime, I encourage you not to base any decisions, positions or comments on the old bill as it will not apply to this proposal in many areas. ~ Ari B. Adler, Press Secretary, Speaker of the House Jase Bolger

Michigan Auto Law: Thank you Speaker Bolger. Appreciate your comments and look forward to seeing the bill you plan to introduce. Additionally, look forward to hearing your thoughts on the points we raised. Additionally, with all due respect, it appears, based on what was published in the media, that your proposed restrictions on attendant care benefits are the same as those proposed in last year’s bill to change No Fault, House Bill 4612. Thank you and look forward to continuing this conversation.
Jase:  Michigan Auto Law I’ve posted a new comment in this column thread, as well as a link to the draft of the substitute for the original bill.

Regarding your initial concerns, here’s what I’ve found out and you can get more from reading the new draft:

The bill does nothing to change the requirement that all reasonably necessary benefits be made available to the person. It does subject the charges for these services to no more than 125% of the workers comp fee schedule, which is set by an advisory committee made up of equal representation by medical providers and insurers. Numerous auto accident claims are paid through workers comp each year and these individuals receive the utmost in high quality care available in this state.

All medical expenses and attendant care expenses will be covered and paid for through an individual’s auto insurance policy. Limiting charges to 125% of one of the highest payers in the state (workers comp) does not affect whether or not an expense is paid for. It simply reduces the cost of the expense, saving consumers money.

Rehabilitative services are covered for up to 52 weeks if they are reasonably likely to produce significant rehabilitation. This may be extended for another 52 weeks if it is reasonably likely to continue to produce significant rehabilitation. After this 104 week period, rehabilitation may be extended indefinitely. These services will continue to be provided to individuals who really need them. The bill simply adds accountability to ensure that ratepayers aren’t covering needless treatments.

Expenses for vehicles and vehicle modifications will be covered every 7 years.

Expenses for home modifications will continue to be covered as long as the modifications are directly necessitated by the individual’s injuries.

Questions as to the reasonableness of charges and services are a question of law under the bill. This means that they will be decided by a court and not by a jury. This is the same standard that exists in statute today. As you know, there is no “right” to a jury trial in civil matters, only criminal matters provide that option.

With regard to the higher average premiums in New York, the NAIC takes all premiums paid and divides them by the number of policies issued in the state. That means it is by no means an apples-to-apples comparison with Michigan. New York’s premiums could be higher due to myriad reasons. I had someone run a quick analysis and they found an online quote for a family of 4 with a 16-year-old driver and relatively high coverage levels ($100,000/$300,000 for Bodily Injury), plus collision for $800 in Albany, New York. That’s the total premium for two vehicles. This exact same family seeking the exact same coverage (but for our currently unlimited personal injury protection benefits) was quoted at $1,700 in Lansing, MI.

Regards,
Ari B. Adler, Press Secretary, Speaker of the House Jase Bolger (^aba)

Michigan Auto Law: Thank you for your comments Speaker Bolger. We will review them along with the draft substitute bill you referenced. (Do you know when you be introducing your bill?) There is one item in your comments that I want to address now. It’s how your proposal strips auto accident victims of their right to a jury trial on issues concerning the “reasonableness” of charges and whether No Fault benefits were unjustly denied and/or terminated. You note that such issues “are a question of law under [your] bill,” which “means that they will be decided by a court and not by a jury.” Your proposal appears to be nearly identical to the one proposed in last year’s effort to change No Fault, House Bill 4612 (proposing, among other things, changes to MCL 500.3157). With all due respect, you are incorrect when you say “This is the same standard that exists in statute today.” Under existing No Fault law, auto accident victims do have the right to a trial by jury on the issues I noted above. There are no existing No Fault statutes that prohibit auto accident victims from having a jury trial and force them to try their case only to a judge – as you are proposing and was proposed last year. Indeed, the Michigan Supreme Court has even approved jury instructions for such cases. For example, the Michigan Supreme Court’s “introductory directions” to M Civ JI 35.01 through 35.04 provide: “The following [jury] instructions are designed for the average no-fault case involving an alleged breach of contract for failure to pay first-party benefits.” (Perhaps you are thinking of how the right to a jury trial is denied to auto accident victims pursuing a claim for noneconomic loss under MCL 500.3135(2)(a).) Additionally, if denying auto accident victims their right to a jury trial on issues pertaining to denial and/or termination of their No Fault benefits were actually the “standard that exists in statute today,” there’d be no need for you to be proposing this “standard” now. Lastly, with all due respect, you are incorrect when you say “there is no ‘right’ to a jury trial in civil matters …” To the contrary, there is a right to a jury trial in civil cases! And that has been the law throughout the U.S. since 1792 and, in recent times, in Michigan since, at least, 1964. For more about the right to a jury trial in civil cases, please see the 7th Amendment to the U.S. Constitution and Article 1, Section 14, of the Michigan Constitution of 1963. Thank you again for your comments and your time.

Here is Speaker Bolger’s article, and all the comments.

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