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Will No Fault PIP ‘Choice’ bill HB 5951 fly in lame-duck session?

November 21, 2016 by Steven M. Gursten

Rumor has it Rep. Sheppard’s deeply flawed HB 5951 will be taken up before MI legislative session ends; here are the top 3 reasons it should be allowed to expire


Hopefully, the rumors I’m hearing are wrong about House Bill 5951.

For Michigan car accident victims, drivers, and consumers, it’d be best if the so-called No Fault PIP “Choice” bill sponsored by Rep. Jason Sheppard (R-Temperance) fails.

It deserves to fail. It’s a terrible bill for reasons I’ve written about previously on this auto law and insurance blog. Specifically, here are the top three reasons why HB 5951 should be allowed to “expire” due to inaction at the close of the 2015-16 legislative session, i.e., on December 31, 2016:

  • Leaves drivers without enough insurance: By allowing drivers and consumers to forfeit their guaranteed unlimited No Fault medical benefits coverage (which protects them in the event of a catastrophic injury) in return for capping or limiting benefits to a specific dollar amount, HB 5951 will leave motor vehicle accident victims underinsured and without adequate coverage when they need it most: After a serious automobile accident.
  • No guarantee of savings: The so-called “savings” from Rep. Sheppard’s proposal are illusory, at best! First, the bill makes no guarantee of “savings” for consumers (no guarantee of amount or of a duration). Second, even if the bill delivered the savings that the Temperance lawmaker has spoken about with the media, Michigan drivers will still be paying the second highest rates in the country. Third, when Rep. Sheppard says “savings,” you should hear “shifting costs”: Money won’t go back into consumers’ and drivers’ pockets, but rather, toward higher health insurance costs, increased out-of-pocket expenses and higher tax burdens for Medicaid and Medicare.
  • You’ll have to give up catastrophic coverage – but still pay for it: HB 5951 dupes people into giving up their catastrophic injury coverage … but requires them to continue paying for it. Rep. Sheppard has said the key to his bill’s ability to save consumers “as much as 30%, or more” on their MI No Fault automobile insurance is to allow them to opt-out of their long-standing unlimited medical benefits (which encompasses catastrophic coverage) and opt-into limited medical benefits at levels of $250,000, $500,000 and $1 million. But what he hasn’t said about his plan is that HB 5951 would not relieve drivers of the obligation to continue paying for the catastrophic coverage they’ve been duped into forfeiting. In particular, despite giving up their right to collect catastrophic injury benefits, drivers will still be required to pay their annual, per-vehicle assessments to the Michigan Catastrophic Claims Association (MCCA).

Bringing down car insurance prices in a real, meaningful way

Unfortunately, HB 5951 fails at helping Michigan auto insurance consumers and accident victims in the same way that so many of the Republican-backed proposals that preceded it.

But it’s great for the insurance industry.

The bill dismantles one of the fundamental tenets of Michigan’s No Fault law, for illusory savings.

The bill threatens existing No Fault insurance protections and PIP benefits and it provides no meaningful, guaranteed and long-term price savings for consumers and drivers.

This is a shame because the goals of preserving No Fault PIP benefits and protections and saving drivers money are both worthwhile, vitally important and … entirely possible.

As I’ve written previously, I can think of, at least, three effective ways to accomplish the goals I mentioned above:

If only so-called No Fault “reformers” like Rep. Sheppard would “reform” their way of thinking about Michigan’s auto No Fault law, then I bet ideas like those above would be able to get off the ground during the lame-duck session – or anytime.

They work and have been proven in other states as a way of reining in excessive profit margins at the expense of consumers. They are overdue in Michigan.

Background on No Fault car insurance bill HB 5951

Introduced on October 19, 2016, HB 5951 was referred to the House of Representatives’ Insurance Committee. According to the webpage for the “House Committee on Insurance,” no meetings have been held on the bill and there’s nothing listed by way of the bill’s “status.” Additionally, no Insurance Committee meetings are currently scheduled for the rest of November.

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