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Is Gov. Snyder’s plan for auto insurance reform dead?

June 4, 2013 by Steven M. Gursten

HB 4612, which would take away critical medical care for auto accident victims, is met with fierce resistance

No Fault “reform” House Bill 4612 is a good example of the saying “pigs get fat, hogs get slaughtered” in action. HB 4612 was the most extreme insurance industry wish-list to date.  The insurance companies threw moderation to the wind, and tried to make a power play to grab as much as they can while the Republicans, who currently hold all three branches of government in Michigan, are in power.

And then some Republicans, like prominent Oakland County Executive L. Brooks Patterson, started doing the math.  These Republicans and many Democrats came to understand that not only will HB 4612 be devastating for many auto accident victims by capping No Fault medical benefits to $1 million and taking away medical care and rehabilitation that’s critical to their survival, but it would hurt the state of Michigan.

It would hurt great jobs in health care and it would hurt the overall quality of medical care in this state, especially for severe back and neck injuries and for people who have suffered serious brain injuries. Looking further at the wish-list of the insurance companies as embodied in HB 4612, many others came to realize it was too one-sided and extreme, giving claims adjusters immunity on bad faith claims handling, to cite just one example.  To read more, here is a list of the effects HB 4612 would have.

So now it appears HB 4612, as originally proposed by Gov. Rick Snyder and Rep. Pete Lund, isn’t going over as well as the deep-pocketed and extremely profitable auto insurance industry and the Republicans who they make campaign contributions to, had hoped.

Michigan Auto Law was recently interviewed in Michigan Lawyers Weekly by Gary Gosselin in a story tracking the progress of House Bill 4612.

According to our attorney, HB 4612 may likely die and at the least, is headed for compromise. The clear bi-partisan opposition to the bill, and outcry from auto accident victims and medical providers – and even fiscally conservative Republicans – is what’s driving the split.

Based on the number of “no” votes tallied when the bill was voted out of committee, the bill may is likely to “… lie on the floor for the rest of the term:”

“[The legislation] is such an overreach; there is nothing in the bill to negotiate. The only things that could survive [are] some kind of cap and some kind of balanced fraud program — it would have to be balanced and must address fraud by the public but also must address fraud by the [insurance] industry.”

Here is the full story in Michigan Lawyers Weekly.

As to the Insurance Institute of Michigan Executive Director Pete Kuhnmuench’s claim in the article that once the $1 million cap is reached, there is still private insurance or Medicaid…why should this be shifted to taxpayers?

Why should the insurance companies that sell auto insurance in Michigan and who are already some of the most profitable in the entire nation, be allowed to explode profit margins by shifting the costs of unprofitable claims to you and I as taxpayers, when we already are paid a premium to insure against this, and the auto insurance companies, in the words of one former state insurance commissioner, are “extremely profitable?”

Michigan No Fault auto insurance has worked incredibly well for nearly 40 years.  It provides tremendous value to Michigan drivers.

Also, Kuhnmuench made the ridiculous and insulting assumption that if there is  $1 million cap, accident victims will be more frugal with the amount of money they spend on necessary medical care.

Pete, if someone you love suffered a spinal cord injury, would you want to be counting pennies and rationing rehabilitation?  If you were paralyzed, would you say, I think I will take a pass on rehabilitation to help me to walk…I’d rather stay in my wheelchair because I am too close to my cap amount?

Or would you do everything possible to get the best you can for those you love?

This kind of disregard for auto accident victims and what is in the best interests of Michigan taxpayers – not its insurance companies – seems to be what’s causing HB 4612 to struggle.

HB 4612 should be left to die on the floor of the Michigan Legislature.

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