Ann Arbor lawmaker says no-fault insurance reform will bankrupt accident victims in Michigan
State Rep. Jeff Irwin, D-Ann Arbor, today denounced Republican-sponsored House Bill 4936, arguing it unfairly limits auto insurance benefits for accident victims in Michigan.
Irwin said the controversial no-fault legislation, introduced by state Rep. Pete Lund, R-Shelby Township, would bankrupt accident victims and their families.
Allowing auto insurance companies to limit insurance benefits, Irwin argued, would force many of those suffering from prolonged auto injuries — like traumatic brain injury — to turn to other health care options such as Medicare and Medicaid, which he said greatly increases the burden on the taxpayers who pay into those programs.
When Lund introduced the bill in September, he characterized it as a cost-saving reform to Michigan's no-fault insurance system that also increases consumer choice. The legislation was referred to the House Committee on Insurance.
Officially known as the Consumer Choice Insurance Act, Lund has argued since last month that the legislation would allow Michigan motorists to choose and purchase different amounts of coverage and eliminate the mandate to purchase unlimited lifetime medical benefits.
Under HB 4936, Lund said, motorists would be given the choice to purchase any one of a variety of plans to suit their needs, including up to $5 million in coverage.
"While families across our state have watched their jobs leave and incomes fall, their insurance premiums continue to rise," Lund said in a statement. "We are the only state in the nation where motorists are required by law to purchase unlimited medical insurance. I see no reason why government should be an accomplice in picking the pockets of Michigan drivers."
But there are no requirements in the legislation for insurance companies to reduce rates to reflect their reduced liabilities, Irwin argued today.
Also, Irwin said, consumers would be prevented from buying unlimited coverage as they do today, and instead would be forced to buy $500,000, $1 million or $5 million in lifetime coverage. Once that coverage is exhausted, Irwin said, victims and their families would be left to bankruptcy and eventually Medicare and Medicaid.
Irwin said victims would be forced to seek compensation through the courts.
"Thousands of jobs will be lost almost immediately," Irwin said. "Just in Washtenaw County, we have hundreds of good-paying jobs in rehabilitation and traumatic brain injury care."
Irwin said services such as intensive physical therapy and comprehensive home care no longer would be covered. Instead of aggressive rehabilitation, he said, victims would be pushed toward taxpayer-funded nursing home care.
In addition to limiting insurance benefits, Irwin pointed out the legislation includes a $50,000 appropriation to prevent a voter referendum on the bill.
"The $50,000 appropriation is solely intended to keep voters from overturning this ill-conceived law as they have twice before when attempts were made to limit no-fault insurance benefits," Irwin said. "Republican leaders know that no-fault insurance is popular and successful, which is why they want to take away the citizens' right to referendum."
Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at firstname.lastname@example.org or 734-623-2529. You also can follow him on Twitter or subscribe to AnnArbor.com's e-mail newsletters.