Detroit Mayor Mike Duggan is trying to make car insurance less expensive for Detroiters with his “D-Insurance” plan. This is an admirable and worthy goal, in a city where an estimated 50% of Detroiters are uninsured.
The problem is, Duggan’s plan is awful. What he’s proposing to do would also make Detroit residents extremely vulnerable if a car accident does occur. Detroiters would lack critical medical care – and they would still be paying more than drivers in the rest of the state of Michigan.
That’s the definition of a bad deal for Detroit. And it’s an unfortunate example of a politician who wants to say he did something about a problem, rather than actually fixing it.
Currently in Michigan, if you get hurt in a car accident, you get unlimited auto accident-related medical coverage under Michigan’s No Fault laws.
Duggan wants to take these legal protections away, and cap the medical coverage needed for accident victims to $25,000 for all No Fault expenses, including medical care.
I’ve been receiving a lot of comments from readers on Duggan’s insurance plan. Today, I wanted to respond to one naysayer, who says D-Insurance is the right idea, because the proposed medical care caps are better than nothing. Below are four things Detroit drivers must know about the plan:
1. $25,000 No Fault benefits and medical care cap: D-Insurance Plan’s proposal recklessly and irresponsibly limits Michigan auto accident victims to an unrealistic $25,000 cap on all of their non-“critical” or “post-stabilization” medical-care expenses, wage loss and replacement services. This includes, but is not limited to doctor visits, diagnostic testing, surgeries, injections, physical and occupational therapy, attendant care, home- and vehicle-modifications and lost wages.
2. $250,000 ER medical cap: D-Insurance proposes a $250,000 cap at the ER or the trauma center BEFORE the auto accident victim has been “stabilized” and can, thus, be “safely … discharged or transferred to another acute care hospital or trauma center or to a rehabilitation or other facility …”
Once an auto accident victim has been “stabilized,” the $250,000 in “critical care” coverage terminates, leaving the victim with only $25,000 to cover all of the No Fault benefits he or she will need in the days, months and years to come.
3. Your choice of doctor can be denied: Not only must an auto accident victim contend with the limited coverage for his or her medical care expenses, but he or she may also be denied choice of doctor. To add insult to injury, through a “written preauthorization” requirement, under the D-Insurance Plan, auto insurance companies would get to play doctor by denying medical services for auto accident victims based on the auto insurers’ determination of what is a “medical necessity.”
4. Not enough savings: The savings consumers may receive from the D-Insurance Plan would be relatively little – and, in most cases, woefully inadequate in light of the benefits and protections consumers would be forced to sacrifice under the D-Insurance Plan. As I noted in my recent blog post, “Why Mayor Duggan’s D-Insurance plan will further drive Detroiters out of the Motor City“:
“In his written testimony before the Senate Insurance Committee on May 26, 2015, Mayor Duggan stated that the ‘average Detroiter’s annual car insurance is $3,400’ and the ‘average for surrounding communities is $1,700.’ This means that even if D-Insurance could generate Duggan’s anticipated ‘$1,000 savings for many Detroiters,’ they’d still be paying $2,400 for car insurance. That is still $700 more than the ‘surrounding communities.'”
For more, take a look at my blog post on “8 reasons Duggan’s D-Insurance plan is D-angerous for Detroit.”