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Faulty Detroit News Editorial on Duggan Insurance way off track

March 1, 2018 by Steven M. Gursten

Detroit News Editorial praises Duggan Insurance plan without admitting how much worse things will be for injured car accident victims and Michigan drivers than under a pure tort liability insurance system

Duggan Insurance would be worse for car accident victims than pure tort liability system

The Detroit News’s recent editorial, “Fix no-fault, don’t scrap it,” advocates for a D-Insurance type plan for Michigan, but without ever acknowledging how much worse things would be for people – and especially for people seriously injured in car accidents – under the insurance system it is advocating for.

The paper heaped praise on the defeated and quite awful Theis-Duggan-Leonard proposal of “capping lifetime [No Fault medical] benefits” (which the paper troublingly calls the “most effective fix”). It also condemns the notion of Michigan “[r]eturning to a pure tort system …”

What the Detroit News fails to grasp, however, is that Duggan’s plan (also known as House Bill 5013) is worse – much worse – for car accident victims than even a pure tort liability system such as exists in Ohio and 37 other states today.

Duggan’s plan leaves car accident victims largely in medical debt and bankruptcy if they are hurt badly enough because it gives total immunity to the at-fault driver. Hit and paralyzed by a drunk driver?  Doesn’t matter – that negligent driver has total immunity for all medical bills beyond the $25,000 No Fault cap that is the centerpiece of D-Insurance (the remaining $225,000 is only for acute emergency room care, and was basically a bribe to get the big hospitals to support his plan).

That $25,000 No Fault cap covers everything and also denies them the basic legal right to sue the at-fault driver for all of the needed medical, lost wages, replacement services, attendant care, etc. that pile up beyond the $25,000 cap.

Under Duggan’s plan, once a victim burns through her private health insurance, Medicaid, Medicare and, very likely, her family’s life savings, she’s on her own to fend for herself.  It’s personal bankruptcy and Medicaid for medical debt and bills.

A pure tort liability system isn’t perfect, but it is a heck of a lot better than Duggan’s D-Insurance. I still support our own auto No Fault system in Michigan, and I’m willing to pay more for it, but if drastic changes are necessary a pure tort system is far superior to D-Insurance.

At least under a pure tort liability insurance system, an injured person can still sue the at-fault drivers for the full amount of their harms and losses. And since most pure tort states make it mandatory or at least more strongly incentivize coverage such as uninsured and underinsured motorist coverage, far more people are driving with much more insurance available to protect them. The combination of a negligent at-fault driver’s insurance policy limits and an injured person’s own underinsured motorist coverage acts as a global PIP cap of $250,000 or $500,000 in many instances because far more people have underinsured motorist protection. In Michigan today, these are optional coverages and insurance agents don’t even have to inform a customer that they even exist!

It’s astounding (and disappointing) that the Detroit News would make such an uninformed recommendation as to embrace Duggan’s plan.

Why the Duggan plan was so horrible and rightly defeated?

I know it’s been a while since the Theis-Duggan-Leonard plan (which the Detroit News curiously refers to as “a proposal offered last year by Detroit Mayor Mike Duggan,” even though he’s not a member of the Michigan Legislature) went down in flames in a 63-45 House vote in November 2017, but here’s a reminder for the Detroit News about why the plan was so horrible and so roundly defeated:

  • Price savings (temporary and indefinite as they were) were available only for those drivers who opt for HB 5013’s woefully inadequate $25,000 No Fault benefits cap (the one Mayor Duggan disingenuously and misleadingly describes as a $250,000 cap on “medical care”), which won’t even cover the average No Fault medical claim or more than a year’s worth of wage loss benefits (for earners with an annual income of $30,000 or less).
  • The $25,000 cap isn’t a cap, it’s a “$25,000 bridge”: One of the most enlightening moments during one of the hearings before the House Insurance Committee was when Chair Lana Theis (R-Brighton), who is also the sponsor of HB 5013, was asked about the plan’s $25,000 cap on all No Fault benefits. She explained it wasn’t a cap and it wasn’t intended to be the “end all, be all.” Theis said it’s a “$25,000 bridge” that “covers immediately” just long enough to get a car crash victim “on to the next coverage,” whether that be personal health insurance or Medicaid or Medicare.
  • Neither private health insurance nor Medicaid would be adequate substitutes for No Fault as neither covers anywhere near as many of the services and treatments that No Fault covers for car accident victims.
  • It imposed arbitrary and unprecedented restrictions on in-home, family-provided attendant care.
  • Auto accident victims whose medical expenses exceed the $25,000 cap will be prohibited from suing to recover for those “excess” medical expenses, even though Duggan had previously advocated that, should No Fault caps be implemented, a car accident victim should be able to sue the at-fault driver, i.e., “negligent driver” for excess medical.
  • Duggan’s plan gave auto insurance companies more excuses to deny/cut-off No Fault benefits claims and made it harder for victims to sue to recover overdue, unpaid benefits.
  • Duggan’s plan also gave insurers so much leeway in terms of harassing doctors and hospitals that treat and care for car accident victims, that victims’ access to medical care could be in serious jeopardy.

Rather than scrutinize Duggan Insurance, Detroit News completely mischaracterizes court rulings

We live in an age where one side or another screams “fake news” to almost every headline. But, really, to suggest, as the Detroit News does in its editorial, that car accident victim-friendly rulings from the Michigan Supreme Court have spurred a drastic spike in costly No Fault litigation is, hands-down, the most absurd thing the paper could’ve written.

It’s ridiculous. It has no basis in reality.

Here’s what the Detroit News said:

“While no-fault was supposed to keep the settlement of auto accident claims out of the courts, lawsuits have climbed, thanks to rulings by the state Supreme Court expanding the types of personal injury claims that could be filed.”

Here’s why that statement is so ridiculous.

It completely ignores the dozens of devastating and partisan Michigan Supreme Court rulings – from our heavily Republican and very conservative Court – that are choking the life out of our No Fault law today and actively preventing thousands of injured car accident victims from getting the medical care and treatment they need – and are legally entitled to receive – under No Fault.

A short list of those opinions include: Kreiner, Bahri, Admire, Cameron, Douglas, Devillers, Johnson and Krohn. They are among the reasons that a study has concluded that the Michigan Supreme Court has ruled in favor of insurers in 84% of major No Fault cases.

No Fault lawsuits are filed because insurers deny and cut-off claims – not because the Michigan Supreme Court, with its rulings, keeps stacking the deck against car accident victims.

Yes, there is also lawyer fraud and it gives the entire legal profession a black eye. If the Michigan Attorney Grievance Commission ever did its job and did something to actually police and regulate the legal profession (as it is required to do), much of the ugliness with ambulance chasing and solicitation could have been largely stopped in its tracks. It’s been nearly 20 years by my own research since the Michigan Attorney Grievance Commission has prosecuted an accident attorney for ambulance chasing and solicitation of car accident victims, even though the practice has exploded in cities like Detroit over the past decade.

But this increase in lawyer fraud has nothing to do with a heavily Republican Michigan Supreme Court that most lawyers would say has been following an outcome-determinative agenda in favor of the insurance industry and at the expense of car accident victims.

Meanwhile, the insurance industry commits egregious acts of bad faith and fraud in this state, requiring lawsuits to be filed and everyone else gets the blame. It’s good to be an insurance company in Michigan.

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