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Is Fair and Affordable No-Fault insurance reform the answer?

MI House lawmakers’ new Fair and Affordable No-Fault insurance reform legislation a better way to preserve PIP benefits, legal protections for car crash victims

Fair and Affordable No-Fault insurance reform

Yesterday, a group of Democratic and Republican Michigan House lawmakers announced they would soon be introducing their Fair and Affordable No-Fault insurance reform plan.

Importantly, Rep. Tim Greimel (D-Auburn Hills) was quoted by The Detroit News’ Jonathan Oosting as saying the forthcoming bipartisan legislation would:

“‘[G]uarantee a rate reduction of 20 to 30 percent for Michigan drivers without reducing [the existing] benefits,’” such as reasonably necessary lifetime medical care coverage from car accidents, which are guaranteed by Michigan’s auto No-Fault Law.

As a No-Fault and auto accident attorney, this is exactly what I’ve been writing about for years on this Auto Lawyer blog.

Instead of blindly hacking away at our current No-Fault system without any idea what the profit margins are of the insurance companies who are pushing hard for so-called reform, there are better ways to bring down car insurance prices while simultaneously preserving No-Fault insurance benefits and legal protections for car crash victims.

Many of the proposals contained in House lawmakers’ Fair and Affordable No-Fault insurance reform are the same suggestions I’ve been writing about for years.

For example, here are some of the key ideas that the Fair and Affordable No-Fault insurance reform plan and this blog have in common:

Of course, there are still many, additional insurance reforms that should be considered.

But the proposals in the House lawmakers’ Fair and Affordable No-Fault Insurance reform plan (assuming they’re actually and officially introduced as legislation soon) are an important start.

Fair and Affordable No-Fault insurance reform meets the insurance industry’s requirements, too

Before I get into the specifics of each of the Fair and Affordable plan’s No-Fault reforms below, I want to make a key point:

Whether the insurance industry wants to admit it or not, the Fair and Affordable No-Fault insurance reform plan proposes two of the essential No-Fault reforms that the insurance industry has also been aggressively pushing as part of any No-Fault reform plan.

Specifically, the Fair and Affordable No-Fault insurance reform plan proposes the creation of both a No-Fault medical-provider fee schedule and a fraud authority.

That’s significant because, even as Insurance Institute of Michigan Executive Director Pete Kuhnmuench was implying to MLive that the Fair and Affordable No-Fault insurance reform plan was inadequate, he explained that in order for a No-Fault reform proposal to bring “real” “cost savings to drivers struggling with the nation’s highest auto insurance premiums,” it “must contain”:

  • “A fraud authority to investigate the rampant abuse and scams within the no-fault system …”; and,
  • A No-Fault medical-provider “fee schedule to reduce the cost of medical care and end the practice of medical providers charging auto insurers three to four times more for the same procedure than other insurers …”

Hmm. Maybe Mr. Kuhnmuench and the insurance industry ought to give the Fair and Affordable No-Fault insurance reform plan a little closer read.

Or better yet, stop pushing and lobbying the mostly Republicans in Lansing to steamroll consumer protection groups as it try to get everything it wants, and realize just how much of what it wants is already in the bipartisan House lawmakers’ Fair and Affordable No-Fault insurance reform proposals.

How would the Fair and Affordable No-Fault insurance reform plan change No-Fault insurance?

Based on reports from The Detroit News and MLive and a press release from the Coalition Protecting Auto No-Fault (CPAN), the Fair and Affordable No-Fault insurance reform plan includes the following proposals:

  • No-Fault medical provider fee schedule: MLive explains that the fee schedule “would tie the reimbursement rates for auto crash victims to 185 percent of the reimbursement rate for workers compensation payment,” but it “wouldn’t apply … at Level 1 trauma centers, which could provide specialty care without hitting a reimbursement cap.”
  • Limitations on non-driving-related, price-setting factors: MLive reports that the bills would limit the factors that “auto insurers can use to set rates, so that auto insurers aren’t using things like ZIP codes or gender to charge some drivers more.”
  • Coordinated policies: MLive reports that, under the proposals, drivers would be required to coordinate their car and health insurance policies so that their auto insurer’s obligation to pay would be secondary and would only kick in one the health insurance policy’s coverage had been exceeded.
  • Punishing insurance company-perpetrated No-Fault fraud: The bills would propose the creation of a “fraud authority to root out fraudulent activity [by auto insurers] that injects more costs into the system,” according to MLive.
  • MCCA transparency: MLive reports that the bills would require the Michigan Catastrophic Claims Association (MCCA) to comply with the disclosure requirements of the Freedom of Information Act (FOIA).
  • Mandatory price reductions: A bill would be introduced by Rep. Greimel that would require Michigan No-Fault car insurance companies to “reduce rates by 20-30 percent …” and to “seek approval for future increases,” according to both MLive and The Detroit News.
  • Restrictions on attendant care benefits: The Detroit News reports the forthcoming legislation “would … establish new limits on home attendant care for crash victims.”
  • Legislative fix to the Michigan Supreme Court’s ruling in Admire v. Auto-Owners: CPAN reports that the forthcoming bills will include “legislation to fix problems caused” by the Michigan Supreme Court’s ruling in Admire vs. Auto Owners, which “has been used by insurance companies to deny paying no-fault benefits for legitimate expenses needed by auto accident victims, including handicapped accessible transportation and even specialized food needed by patients.” CPAN added that the fix, if enacted, would “ensure that accident survivors will have these basic needs met.”

(Sources for information about the plan: “Auto insurance rates would come down 20-30% under House plan, backers say,” MLive’s Emily Lawler, 9/14/2017; “Bipartisan lawmakers unveil auto insurance reform plan,” The Detroit News’ Jonathan Oosting, 9/14/2017; “CPAN Praises ‘Fair and Affordable’ Auto Insurance Reform Legislation,” Coalition Protecting Auto No-Fault, press release, 9/14/2017)

This entry was tagged Tags: Admire v. Auto Owners, CPAN, FOIA, Insurance Institite of Michigan, MCCA transparency, medical provider fee schedule, Michigan No-Fault reform, Michigan Supreme Court, No Fault Fraud
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