New No-Fault legislation likely to pass MI Senate include a feckless fraud authority, thanks to Sen. Joe Hune and Sen. Rick Jones
Yesterday, the Michigan Senate Insurance Committee approved two new No-Fault bills and sent them to the full Senate for its consideration.
There’s a lot NOT to like with these two new No-Fault bills.
The thrust of the Committee-approved version of Senate Bill 787 is the same as the initially-introduced version, introduced on January 25, 2018 by Sen. Rick Jones (R-Grand Ledge):
It induces senior drivers to opt out of unlimited auto No Fault insurance coverage in favor of considerably limited and potentially far more costly coverage provided by Medicare.
Similarly, the Committee-approved version of Senate Bill 1014, which was introduced by Senate Insurance Committee Chair Joe Hune (R-Fowlerville) proposed No-Fault changes that tracked closely to the original bill which was introduced on May 16, 2018:
- Significant restrictions on in-home, family-provided attendant care.
- A No-Fault fraud authority that appears aimed only at claimants (car accident injury victims) and appears to lack any teeth when it comes to cracking down on the rampant fraud that is being committed by auto insurance companies on a daily basis in Michigan.
Notably, unlike the original version of SB 1014, the Committee-approved version contains no proposed No-Fault medical provider fee schedule.
Both of these bills – in their original and Committee-approved versions – are geared toward boosting profits for already highly profitable Michigan auto insurance companies at the expense of drivers and car crash injury victims’ No-Fault rights and legal protections.
I’m hopeful that lawmakers in the Michigan House will be as unreceptive and unaccepting of the proposals in SB 787 and 1014 as they were of Rep. Lana Theis’s (R-Brighton) deplorable ideas in House Bill 5013, which was roundly rejected in a 63-45 vote in November 2017.
Low points of Senate Committee-approved SB 787
If you are an insurance company, there’s a lot to like. If you are a consumer, then not so much.
If passed by the full Michigan Senate, the Senate Insurance Committee-approved version of SB 787 would do the following:
- Dupe drivers who are “65 years of age or older” to surrender currently unlimited No-Fault medical care and PIP benefits in return for being woefully underinsured with only a $50,000 cap on ALL auto No-Fault insurance benefits, including not only reimbursement of medical bills and medical expenses, but also wage loss benefits (as many people no longer retire at 65 but choose to continue working) and replacement services, medical mileage and attendant care.
- Immunize insurance agents against errors and omissions liability for “damages caused” by the agent’s “conduct … related to obtaining or providing information, or the choice of personal protection insurance benefits by an insured” who is 65 years or older and who chooses to trade unlimited auto No Fault benefits for a $50,000 No-Fault cap.
- Require insurers to present to drivers who are 65 years of age or older and who want to give up unlimited No-Fault benefits in return for a $50,000 cap a form that states, “in a conspicuous manner, the benefits and risks associated with” keeping unlimited coverage and/or opting out in favor of the $50,000 limit.
As for the “benefits and risks” of opting out of unlimited No-Fault in favor of a $50,000 coverage cap, I will certainly be interested to see how many – if any – of the pitfalls I’ve previously highlighted will show up on the insurer’s “benefits and risks” statement.
No doubt about it, at first it sounds like a great idea to reduce the cost of auto insurance for senior citizens and drivers over age 65. If it did lower the cost of auto insurance without harming seniors so much, I’d be all in favor of it.
But as I wrote in my January 29, 2018, blog post, “Why allowing seniors to opt out of No Fault for Medicare harms seniors,” this is why it is such a bad idea:
- No guaranteed auto insurance savings
- No Fault cap will leave seniors woefully under-insured in the event of a car crash
- Medicare may not cover auto accident-related injuries and accompanying medical costs
- Medicare will require senior auto accident victims to repay medical expenses from their pain and suffering recoveries
- Medicare won’t cover many of the vital benefits and protections that No Fault readily covers
- Unrealistically low Medicare fee schedules for medical providers could jeopardize senior car accident victims’ access to high quality medical care
- SB 787 discriminates against elderly drivers
- By pushing elderly drivers off No Fault and onto Medicare, lawmakers will be pushing up the Medicare tax burden for all of us
What No-Fault proposals were included in the Senate Committee-approved version of SB 1014?
Significantly, although the Committee-approved version of SB 1014 and the original version of the bill impose similar restrictions on in-home attendant care provided by a car accident victim’s family member, they also include important differences:
- The original version of SB 1014 provides that the hourly reimbursement rate for in-home, family provided attendant is “limited to $15.00 per hour, regardless of the level of care provided” and regardless of skill, training, licensure or employment of the family-member provider.
- The Committee-approved version of SB 1014 provides that the above restrictions kick in only for “attendant care in excess of 56 hours provided in a week,” and that during the first 56 hours the reimbursement “payment is limited to a reasonable and customary amount.”
- The Committee-approved version of SB 1014 omits the provision from the original version of the bill which provides that, if a “medical review” determines that a car accident victim “requires attendant care that exceeds the limitations” above “to provide adequate treatment,” then the “additional care” is covered by No-Fault.
Like the original version of SB 1014, the Committee-approved version lacks the much-needed teeth that last year’s House Bill 4672 had:
Targeting unfair claims and settlement practices of Michigan No-Fault auto insurance companies.