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Still no savings for consumers in Senate No Fault reform plan

In SB 248, Senate Insurance Committee approves restrictions on attendant care and imposes price controls for doctors and hospitals

No savings no fault reform

Auto insurance consumers are still coming out on the losing end of the Michigan Senate’s plan for “reforming” Michigan’s No Fault Law.

Specifically, Michigan auto insurance consumers will save exactly NOTHING under the proposals in “Substitute for Senate Bill No. 248” or “S-2”, which was voted out of the Senate’s Insurance Committee on April 15, 2015, on a 5-3 vote.

By contrast, the Senate Insurance Committee’s version of SB 248 ensures ample savings (read: profits) for Michigan auto insurance companies in the following ways:

  • Implementing unprecedented and permanent restrictions on in-home attendant care for auto accident victims.
  • Imposing permanent price controls on what doctors and hospitals can charge for treating Michigan auto accident victims.

To read more about the original Senate Bill 248, which was introduced March 26, 2015 by Sen. Joe Hune (R- Fowlerville), who is also the chair of the Senate Insurance Committee,  please check out my blog post, “No Savings for consumers in Senate No Fault ‘reform’ plan.”

Specifics are non-existent about how much auto insurance companies are expecting to save (i.e., increase profits) based on the attendant care restrictions in the Senate’s plan.

However, in connection with past No Fault plans, politicians boasted that price controls on doctors and hospitals would generate permanent savings of 55% to 64% for auto insurers.

For more, please check out Michigan Auto Law’s blog post, “Who will cash in on No Fault ‘reform’ fee schedule?”

Standing alone, those savings – and the corresponding increase in profits they will generate – are substantial.

Now, consider that those “savings” are going to Michigan auto insurance companies which, as an industry in 2011, took in nearly $2 billion more in auto insurance premiums than they paid out in claims.

Furthermore, consider that the savings from “Substitute for Senate Bill No. 248” are going to auto insurance companies, who have been described as being “highly profitable.”

With the “Substitute for Senate Bill No. 248” as with the original SB 248, auto insurance consumers are once again left stranded on the proverbial roadside by politicians whose drive to help the auto insurance industry knows no limit.

Having been voted out of the Senate Insurance Committee “with recommendation that it pass,” “Substitute for Senate Bill No. 248” will be sent to the full Senate for its consideration.

Below is a chart that compares “Substitute for Senate Bill No. 248” with SB 248 as well as with the No Fault plans that were introduced in the 2013-2014 legislative session.

Senate No Fault Reform Plan

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Blog Author Steven M. Gursten
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