With HB 4612’s elimination of unlimited, lifetime No Fault medical benefits, it is expected that once auto accident victims exceed HB 4612’s proposed $1 million cap, they will go to court against the at-fault drivers who caused their accidents in order collect their “excess” No Fault medical benefits.
Two insurance industry leaders predicted as much in 2011 after Rep. Pete Lund, R-36th District introduced House Bill 4936, wherein he proposed to cap No Fault medical benefits in much the same fashion as he has done in HB 4612:
Pete Kuhnmuench, Executive Director of the Insurance Institute of Michigan: “Despite what some critics claim, this legislation would not leave people out in the cold. … [Auto accident victims with] accident-related medical claims [that exceed the new medical limits] … can … sue a responsible party for any excess medical losses.” (9/15/2011, Detroit Free Press, guest writer)
Gary Wolfram, President of Hillsdale Policy Group, Ltd.: “Accident victims can sue responsible parties for costs in excess of medical coverage.” (Gary Wolfram, 9/29/2011, “A Brief Analysis of the Anderson Economic Group report, Impact of Proposed ‘PIP Choice’ Law in Michigan)
Former Michigan Insurance Commissioner Thomas C. Jones recognized the same thing more than 30 years ago when the auto insurance industry wanted to cap No Fault medical benefits:
“[L]imiting first party benefits … would simply result in a renewed increase in tort cases as people were required to sue for benefits denied by a limitation on medical and rehabilitation expenses.” (“No-Fault Insurance In Michigan: Consumer Attitudes And Performance,” Thomas C. Jones, Michigan Insurance Commissioner, April 10, 1978, Pages 76-77)
HB 4612 clearly contemplated that capping No Fault medical benefits would lead to lawsuits being filed by auto accident victims for “excess” No Fault medical benefits: The bill provides that tort liability exists for “[d]amages for allowable expenses,” which includes medical benefits, “in excess of the personal protection insurance benefits provided” under HB 4612. (Page 43 of HB 4612)