Michigan's no-fault car insurance system needs reform, but HB 4936 is not the answer
As debate in Lansing rages over a stunningly complex proposal that would bring “consumer choice’’ and stringent cost-controls to the state’s no-fault auto insurance system, there are two simple observations we’d make.
The first is that Michigan motorists pay the highest auto insurance rates in the country -- about $1,000 a year more than the national average.
The second is that Michigan is the only state in the union that provides unlimited, lifetime medical care to people who are catastrophically injured in car accidents.
Is one the result of the other? To some degree, yes. That’s why we’re open to the idea of no-fault reform in Michigan, as long as it is structured in a way that strongly protects the interests of consumers.
Michigan has been a no-fault state since 1973, joining a movement that was sweeping the nation at the time. No-fault was touted as a fairer, more affordable alternative to the “tort” system under which a person injured in an accident sued the driver at fault in order to recover money for medical expenses.
Under no-fault, insurance companies pay into a fund that covers the medical costs of those injured in car accidents -- and pass that cost along to its customers. Those costs have turned out to be huge, and growing at an alarming rate.
That’s why the no-fault movement has fallen out of favor. According to a study by the Rand Corp., states that adopted no-fault saw auto insurance premiums increase much more than expected, because of the inability to control spiraling medical costs. In states that have moved away from no-fault, insurance premiums have gone back down.
In Michigan, the insurance industry says the costs of the current system are unsustainable, and that reform could cut auto insurance rates anywhere from 15 to 50 percent. It’s pushing legislation that would end lifetime, unlimited medical benefits for accident victims in favor of a system where customers can choose a level of coverage, from $500,000 to $5 million. Beyond that, the costs would be shifted to other sources, including Medicaid.
No-fault reform
To learn more about this issue:
- The Coalition for Auto Insurance Reform supports the proposed legislation. You can see its answers to frequently asked questions by clicking here.
- The Coalition Protecting Auto No-Fault opposes the reform plan. You can see its analysis of the proposed legislation by clicking here.
Controlling medical costs is a concern everywhere these days, and we agree the current system doesn’t have adequate costs controls, which is costing consumers millions of dollars. People who are grievously injured in auto accidents deserve quality care, but not at a run-away cost that many motorists in Michigan can’t afford.
That’s why we’d support reasonable efforts at cost-containment as part of a larger reform that achieves lower rates for consumers without impoverishing accident victims or sentencing them to substandard care. That is not, however, what HB 4936 is about. It’s heavily weighted in favor of insurance companies at the expense of consumers and injured drivers.
We’re concerned that some of the restrictions on medical costs go too far, and could compromise the level of care for seriously injured motorists. Beyond that, we find the bill to be missing some basic consumer protections that we think should be part of any reform.
As critics of the bill point out, there’s nothing in it that requires insurance companies to pass the savings along to consumers. Nor does the bill create the kind of openness that must be brought to the current, secretive system. The board of the Michigan Catastrophic Claims Association, which pays the medical and rehabilitative costs of accident victims under no-fault once that cost exceeds $500,000, is not subject to the state Opens Meeting Act or Freedom of Information Act. Nor does the public have access to the MCCA’s audited financial statements. We can’t support any reform that doesn’t correct that lack of transparency.
Nor can we support a bill that includes a provision that would prevent citizens from exercising their right to seek a referendum if it becomes law. Twice before, in 1992 and 1994, Michigan voters turned down efforts to reform the no-fault system. That was nearly two decades ago, and voters might feel differently now, given that what a driver pays into the MCCA has gone from $5.60 per car in 2000 to $145 per car today. But that should remain their decision. The right to another referendum on the issue should not be stripped from them.
No-fault insurance reform is a fantastically complex issue, and much is at stake. Over time, the kind of reform being contemplated could shift billions of dollars in medical costs from insurance companies to taxpayers. The insurance industry is capable of looking out for its own interests. The job of the Legislature is to look out for the public’s interest. House Bill 4936 fails to do that, and that’s why it must be rejected.
(This editorial was published in today's newspaper and reflects the opinion of the Editorial Board at AnnArbor.com.)
Comments
Regina Rinchetti
Sat, Jan 14, 2012 : 12:24 a.m.
In the state of Michigan if you are uninsured you can not get no fault benefits,but if you are insured and in an accident with someone who is not, you are covered. If you are a pedestrian hit by an uninsured motorist you are covered by a pool paid into by all the insurance companies. The only time you really know how important no fault benefits is when you or someone you know is in a catastrophic accident. Most of these injuries last a lifetime.
Mike
Sat, Nov 19, 2011 : 3:14 a.m.
How is it in the public's interest that people who are injured are not able to afford care? This is the big whiskey-tango-foxtrot moment for me. I mean, here you are, you pay for insurance and an accident happens that they pay for the ambulance ride and that's it. There's no expectation that rates will go down. There are no promises to this effect. There are no guarantees. There is no track record that rates will go down. So basically, injured people will go without treatment or care and insurance companies will have increased profits. Why is this even being contemplated in the legislature?
Stephanie Trax
Wed, Nov 16, 2011 : 2 p.m.
Tony, I am a local insurance agent. I completely agree with your article and your opinion. However, I want to point out that it's unlikely that Michigan is the most expensive for insurance in the state. I have many customers who move out of state and try to hold on to their Michigan policies as long as possible because they don't want to pay the higher rates in the new state- usually somewhere in the East. The Motor Trend article that you reference is based on an auto quote for one particular individual. Although this survey is from 2008, it's probably more accurate: <a href="http://www.iii.org/media/facts/statsbyissue/auto/" rel='nofollow'>http://www.iii.org/media/facts/statsbyissue/auto/</a> That one was run by the Insurance Information Institute. We are still one of the more expensive states, but certainly not the highest. Besides that, I really appreciated your article. You are right that the current proposed law is aimed to serve insurance companies alone. It will only serve to tempt the average Joe to select low limits of coverage and unfortunately open themselves up to financial devastation and substandard care after a serious auto accident. You are right that the no-fault structure, not just the PIP, is causing our higher rates. Warm Regards, Stephanie Trax
Jason Theodoroff
Tue, Nov 15, 2011 : 4:06 p.m.
I get really upset when i see so many people fooled by the insurance industry. They promise rate cuts and other benefits but let me ask you, HOW MUCH IS YOUR LIFE WORTH TO YOU? I am a car accident victim who has sustained a traumatic brain injury. I paid my insurance with the understanding that if I were ever involved in a serious accident I would be taken care of regardless of fault. If you are going to bash this system or vote against it you better pray that you have enough coverage in case you are involved in an accident and you are determined to be at fault. The system works for Michigan and you know what they say, IF IT AIN'T BROKE DON'T FIX IT.
Darwinia
Tue, Nov 15, 2011 : 12:18 a.m.
Under this reform, a future accident victim might be an 18 year old quarterback who's car skids on the ice and wraps around a tree. His family and friends rally to raise funds for things like this <a href="http://blog.amsvans.com/7399-video-game-controllers-for-quadriplegics/" rel='nofollow'>http://blog.amsvans.com/7399-video-game-controllers-for-quadriplegics/</a> which give him a social outlet but he still needs someone to lift him into his chair to use it. For awhile he can stay at home but there is only an aid part of the week. The rest of the time he has to rely on family and friends while trying to ignore that they see his most intimate details. His friends leave for college, his aging parents cant lift him anymore. The car insurance coverage is maxed, the health insurance runs out, his parents are bankrupt, leaving only the rest of his life in a nursing home to look forward to. The consequences of these changes put everyone at risk and only protect the auto insurance industry. All residents need the chance to assess their own risks, and what assets are protected now that won't be once the unlimited coverage is gone. What if my example was your loved one? What if it was you? Could you face a minute in a nursing home? What about an 18 year old facing 50 or 60 years of that life? The legislators behind this bill are out of touch and are not offering enough in return for this to be an acceptable risk.
Roadrunner
Mon, Nov 14, 2011 : 4:27 p.m.
When I look at my car insurance statement, the PIP portion is low compared to collision, theft etc. I don't want to loose catastrophic injury benefits that barely impact the bottom line of my insurance rate.
Roadrunner
Mon, Nov 14, 2011 : 4:30 p.m.
Correction, "lose" not "loose".
lynn
Mon, Nov 14, 2011 : 2:24 p.m.
Michigan does not have the highest cost of car insurance although we do have the most comprehensive coverage. The car insurance companies have been quoting from insure.com which used an invalid sampling method. The "source of truth" is from the report generated by all state's insurance commissioners. We are ranked 11th. We are second in the cost of fixing our car and 17th when it comes to premiums collected for liability and medical expenses (fixing the person). Michigan citizens have voted twice through referendum to not change their car insurance benefit. With House Bill 4936, the legislature took away our right to go to referendum. That is not right to take away this right!
nancy
Mon, Nov 14, 2011 : 2:38 a.m.
The tone of the article is good, but, it is simplistic and wrong in some details. For example, the "cost of auto insurance" in general is distinct from the "cost of no-fault insurance." Auto insurance includes coverages like collision and comprehensive that are the coverages driving high insurance costs. This simple but critical fact has been lost in the commentary on the law. And yet, anyone and everyone can confirm this by simply looking at their own dec sheets, as I urge everyone to do. Also, the comment from "gooday" that people who drive uninsured can claim millions of dollars in catastrophic losses in false. People who drive without insurance on their vehicles are disqualified from NF coverage under the current system.
Don B. Arfkahk
Sun, Nov 13, 2011 : 10:23 p.m.
Those who are badly injured should just be allowed to pass on. It costs less to grow and train a new worker than to keep a wounded one alive. My profits would increase. What trickled down would be a matter of debate.
KD
Sun, Nov 13, 2011 : 4:03 p.m.
I oppose HB 4936 and it's disguised attempts to give consumers 'choice.' Since you do not choose what type of accident you might be in one day, how can you choose your level of coverage? Who's 'choice' does it become if that person exhausts their cap and has to turn to medicaid? This bill does nothing but promise a cost SHIFT to taxpayers, cuts good healthcare jobs, and puts Michigan drivers at risk.
snoopdog
Sun, Nov 13, 2011 : 2:05 p.m.
Hypothetical question- someone driving their car without insurance (for years btw) gets into a "catastrophic" accident and needs intensive medical care for life. Should they get that benefit since they were not insured ? I say no way, if you are not supporting it though your insurance payments you cannot collect. No fault insurance is bad for everyone, especially for my wallet ! Good Day
Regina Rinchetti
Sat, Jan 14, 2012 : 12:28 a.m.
You should read the no-fault law ,uninsured motorist can not claim benefits.
dswan
Sun, Nov 13, 2011 : 1:52 p.m.
"We're concerned that some of the restrictions on medical costs go too far, and could compromise the level of care for seriously injured motorists. Beyond that, we find the bill to be missing some basic consumer protections that we think should be part of any reform." Then, by all means, please state the 'restrictions that go too far." This bill will be debated in the House and Senate and changes can be made to cover concerns. At the request of the Insurance Industry, the minimum threshold on this bill has already been raised from $250,000 to $500.000 for personal injury coverage. The minimum in many other states is $50,000. Michigan will continue to have the most generous benefits available, yet consumers will be able to choose how much they need. $250,000 will cover 99% of injury accidents, and after the you reach the maximum, your medical insurance would be responsible for anything remaining. The current system forces insured to pay duplicative costs - health and auto insurance premiums for the same coverage; which is why Blue Cross Blue Shield is funding the opposition to this bill. Hospitals are also opposed as they would have to adhear to a schedule of costs, as they already to with Workers' Comp claims. "As critics of the bill point out, there's nothing in it that requires insurance companies to pass the savings along to consumers." Insurance is complex and has many variables. The bill can't promised "insurance rates will go down 25%, we promise." Everyone's situtation is different. The less the risk, the lower the rate. Call your insurance company, they'll tell you rates will do down. The MCCA will continue to cover costs incurred by existing accident victims. There will be no windfall to insuarance providers. If this doesn't pass, count on your auto insurance rate increases to mirror that of medical costs, year after year. When the MCCA has been overfunded in the past, a refund is provided to insureds via a cr
Darwinia
Wed, Nov 16, 2011 : 1:38 a.m.
Tony, While Ann Arbor City Council was busy playing with artwork, Farmington unanimously passed a resolution in opposition to HB 4936. The interconnected fallout from these changes has drastic meaning to Ann Arbor and Washtenaw county. When will AnnArbor.com finally get out in front of covering this in the depth it needs?
Darwinia
Wed, Nov 16, 2011 : 1:28 a.m.
common_cents, the thanks really goes to the old Ann Arbor News for not hiring me when the direct care field did. Us "unskilled workers" lift, cook, clean, advocate, budget, plan, listen and much more 24/7 so that others can return to their families and workplaces living as independently as possible. We're able to do that because 38 years ago, Michigan leveled the playing field for everyone. The most important part is getting lost in all the rhetoric; accident victims are able to recover without worrying about finances and what their families will do. Its not possible to compare it to what goes on in other states because our state took a huge lead in the nation by doing this. HB 4936 is a gigantic leap backwards towards <a href="http://aaobserver.aadl.org/aaobserver/13033" rel='nofollow'>http://aaobserver.aadl.org/aaobserver/13033</a> and a history that should never ever be repeated.
dswan
Tue, Nov 15, 2011 : 7:41 p.m.
Darwinia, You've broadened my perspective on this issue. Thanks! At this point, I wish I had more data. For example, how is it that other states have limitied injury benefits - as low as $50,000; are there more medical related bankruptcies; are health insurance rates higher; are providers allowed to bill auto insurance cos. significantly higher than health insurance cos.? Similar to a family without health insurance coverage being billed at a much higher rate than one with coverage for the same services; auto insurance cos. face the same fate. Why is this? Are providers looking to fill a gap caused by low Medicare reimbursement or is it for no other reason besides the law allows it? The bloated costs get passed to us, we ought to know why they exist. If auto insurance companies got the benefit of paying the same rates negotiated by health insurance companies, I'd gladly pay for unlimited benefits. I forgot all about the appropriation trick, and it seems it's now commonplace. I don't have anything I can say about this practice that wouldn't be removed by AA.com. Given the complexity involved, hopefully the debate in the legislature will be rigourous and lead to legislation that forces reasonable rates and maintains benefits. But with one party in control, anything could happen. Regards.
Darwinia
Mon, Nov 14, 2011 : 10:23 p.m.
The end cut off again, should have read "Any sort of set fee payments would have to be realistic to traumatic situations." @Tony, thanks for your response. I did report myself so the mispost could at least get removed. Above is what I intended to post down here. The way the system is set up really does make it cumbersome to try and participate. My apologies again for making it confusing.
Darwinia
Mon, Nov 14, 2011 : 10:17 p.m.
"Personally, I haven't seen any Insurance-funded comercials related to this Bill, only Hospital and Medical Insurance-funded commercials. I guess I don't watch enough TV." Interesting how you have only seen those and not the misleading ones that claim the "reform" benefits seniors who already have medicare by eliminating the "double health insurance". The PIP is not health insurance as it only covers injuries from an accident for as long as those injuries exist. It doesn't cover health care in the general sense, and the "reform" does nothing for those injured once they reach their cap, especially if they don't have their own health insurance. What we have right now is something which only drivers pay into. Under the changes, we all will end up paying as people are shifted over to Medicaid, or for higher hospital costs as they have to absorb unpaid hospital bills . That affects all taxpayers, even the non-driving ones. "...You bring up the most crucial piece of this bill in your last post - the cost of the services paid on auto insurance claims vs. workers comp. claims. Providers have been over charging Auto Insurance companies, and with BCBS have combined to create ads featuring accident victims to pull at the heartstrings of the public, barely scratching the surface of the issues. If the workers comp schedule was applied to auto insurance claims, and everything else on this bill was removed; this would still be valuable legislation." Again, interesting that you are seeing such ads. I've been watching for ads on either side with this and have not seen what you describe. If MCCA is put on a workers-comp schedule, performing a procedure in a traumatic situation is very different than most work related injuries would be. Also, it would make it too easy for a bean counter somewhere along the way to go "Those state cuts to workers-comp coverage count towards this too." Any sort of set fee payments would have to be r
Tony Dearing
Mon, Nov 14, 2011 : 8:38 p.m.
Sorry, but the system isn't set up in a way that allows us to move comments. You've explained that a couple of the comments were accidentally misplaced and someone reading the comments will be able to continue to this portion of the discussion and see what you have to say. Thanks for being part of the discussion on this important issue.
Darwinia
Mon, Nov 14, 2011 : 7:44 p.m.
@Tony, I landed some responses in the wrong location, is it possible at all to move them? (See AlfaElans post for where they landed.) @Common_cents, this goes so much farther than just reaching "an employers ceiling" for pay. Please see <a href="http://annarbor.com/news/nursing-home-where-maggots-infested-catheter-gets-much-improved-inspection-report/">http://annarbor.com/news/nursing-home-where-maggots-infested-catheter-gets-much-improved-inspection-report/</a> and also <a href="http://www.annarbor.com/health/renaissance-community-homes/">http://www.annarbor.com/health/renaissance-community-homes/</a> for an idea of things that happen when there aren't enough workers. As one of the most sweeping changes to pro-consumer policy, most people have no idea what it means or what is at stake. I read and reread the bills. As they are written, I still feel like I need a translator and have even less of an answer to what a quadriplegic would do the rest of the time if they only have a caregiver 56 hours a week. The auto insurance industry is counting on most people, including legislators taking their claims at face value. This issue desperately needs to be covered a lot more and in places with non awful formats so nubs like me don't post in the wrong places and make it even more confusing.
dswan
Mon, Nov 14, 2011 : 5:58 p.m.
Tony, You bring up the most crucial piece of this bill in your last post - the cost of the services paid on auto insurance claims vs. workers comp. claims. Providers have been over charging Auto Insurance companies, and with BCBS have combined to create ads featuring accident victims to pull at the heartstrings of the public, barely scratching the surface of the issues. If the workers comp schedule was applied to auto insurance claims, and everything else on this bill was removed; this would still be valuable legislation. It'll be interesting to see how this all plays out in the days ahead...
dswan
Mon, Nov 14, 2011 : 5:55 p.m.
Darwinia, "This legislation has me looking to pack up and leave Michigan. In the meantime, I have also been shedding other insurance (life, rethinking property insurance etc) from my current provider because this legislation sticks in my craw that bad. That's at least 2 premiums he is no longer receiving, more if my family and I have to pack up and leave" - I wouldn't pack up an leave just yet...this bill is far from a sure thing. But you would be hard pressed to find a state with auto insurance benefits that top Michigan's; please let me know if you have any in mind. As the only breadwinner in my family, I can't imagine leaving my house without life insurance, but I'm sure you've weighed the pros and cons and reached the best decision for you and your family. Personally, I haven't seen any Insurance-funded comercials related to this Bill, only Hospital and Medical Insurance-funded commercials. I guess I don't watch enough TV. Regarding pay, on more than one occassion, I've reached the ceiling that my employer allows; and I either went back for more classes or found another employer, which allowed me to move back to Michigan. I agree that pay ought to be based on the market rate and this needs to be corrected in the bill. Insurance laws and products are so complex in nature that it's difficult to debate all the facets in one column or thread of comments. In an ideal world, the public would have plenty of opportunity to consider this and all bills; but what percentage of the public would really be interested? Would participation reach critical mass? Your views have inspired me to read the bill in its entirety and I thank you for that.
Darwinia
Mon, Nov 14, 2011 : 12:09 p.m.
"Where we think the bill over-steps is in setting a specific rate of pay for a specific type of care. I don't know if $11 a hour is the right rate for basic home-care services, or $12.20 an hour or $10.75 an hour. But I agree with Darwinia that it's not the Legislature's job to set pay rates in law. If the right cost-control system is put in place, that system can determine reasonable rates of pay for particular types of services." Tony, the legislation sets the max pay for unskilled caregivers at $11, and max pay for skilled workers at $17. Nationally, the mean wage for nurses is $32.56, <a href="http://www.bls.gov/oes/current/oes291111.htm" rel='nofollow'>http://www.bls.gov/oes/current/oes291111.htm</a> the mean wage for direct care ("unskilled labor") was between $11.46-$12.77 in 2008. <a href="http://www.bls.gov/oco/pdf/ocos327.pdf" rel='nofollow'>http://www.bls.gov/oco/pdf/ocos327.pdf</a> I didn't find exacts on CENAs but its in-between the two others. Not only does this legislation lowball caregiver pay, it doesn't even keep up with wages from three years ago. There is a nursing and direct care worker shortage nationwide. All this legislation does it create one more brain drain on Michigan as people move away.
Tony Dearing
Mon, Nov 14, 2011 : 11:19 a.m.
Good, spirited debate here. From our point of view, one of the fundamental flaws of no-fault is that it turns auto insurers into medical insurers, which is not their area of expertise, so they have not been able to achieve the kinds of expense controls that health insurers have. That's why medical expenses in no-fault have spiraled, driving car insurance rates up to levels that are becoming unaffordable. We see the logic in tying cost controls for no-fault into an existing system, such as the proposal to tie it to the workers compensation system. Where we think the bill over-steps is in setting a specific rate of pay for a specific type of care. I don't know if $11 a hour is the right rate for basic home-care services, or $12.20 an hour or $10.75 an hour. But I agree with Darwinia that it's not the Legislature's job to set pay rates in law. If the right cost-control system is put in place, that system can determine reasonable rates of pay for particular types of services.
Darwinia
Mon, Nov 14, 2011 : 7:27 a.m.
"Insurance Companies are not evil enterprised attempting to take your money. They provide a valuable service, protection of your assets. Not to mention a business product sold by thousands of small business owners (agencies). In Michigan, they are barely breaking even, unable to measure risk to do unlimited medical benefits. Other states, such as Florida, have seen provider pack up and leave, reducing competition and raising rates for all - is Michigan next?" This legislation has me looking to pack up and leave Michigan. In the meantime, I have also been shedding other insurance (life, rethinking property insurance etc) from my current provider because this legislation sticks in my craw that bad. That's at least 2 premiums he is no longer receiving, more if my family and I have to pack up and leave. If no fault is to be reformed, then it needs to cut both ways. It needs to address the real reasons people drive without auto insurance. It cannot address what one industry charges without also really addressing the other industry as well. As for providers packing up, I really can't imagine what it might be like watching an hour of t.v. without at least 3 car insurance ads. What does concern me are the consequences that future accident victims will have as the result of this legislation. It also concerns me what Michigan will be like if thousands more families are forced to leave for jobs elsewhere. What good does it do to make Michigan industry friendly if there is nobody left to sell to?
Darwinia
Mon, Nov 14, 2011 : 6:08 a.m.
"It needs real legislation that controls both health and auto insurance costs without sacrificing care or coverage. This is " Last part was cut off. It should have read "This is not it".
Darwinia
Mon, Nov 14, 2011 : 6:05 a.m.
"...if one doesn't like what one is paid, s/he can choose another employer or profession. We are not forced by the gov't to accept any wage, we can chose our own professional path." You would be ok with the state setting a pay cap for your profession? You would really shrug that off and go find something else to do? If not, then why is that ok for anyone else to be subjected to that? For many long time direct care workers $11 an hour would be a significant pay cut. It would also make it harder to attract workers to a high stress field and significantly affect care with employee turn over. "What appropriation here is being abused?" The appropriation of state funds within the bill that would keep voters from overturning the "reform" as has happened twice in the past. If this "reform" is that good, then why does it need protecting from voters? "The house bill is available to read online, and legislatures welcome the thoughts of their constituents. What other pending legislation has prompted town meetings - perhaps I've missed something?" The consequences of these changes are too great to shrug it off with a "go read it for yourself". It needs to go beyond just what the auto insurance industry is funding in their own interests. It has to go beyond just the misleading ads, and the selective hearing vacuums that the auto insurance industry and their politicians listen in. This needs to be really covered and debated out in the open as to what it really means. Then, take whatever the House and Senate come up with and put it on the ballot. No backroom deals or sneaky tricks that keep it from being repealed. Let the voters decide. "...we can count on insurance increases 10-20% per year. But you are right, we can go without insurance altogether, since the law that requires it is unenforcable." It needs real legislation that controls both health and auto insurance costs without sacrificing care or coverage. This is
dswan
Mon, Nov 14, 2011 : 12:03 a.m.
Darwinia, if one doesn't like what one is paid, s/he can choose another employer or profession. We are not forced by the gov't to accept any wage, we can chose our own professional path. What appropriation here is being abused? The house bill is available to read online, and legislatures welcome the thoughts of their constituents. What other pending legislation has prompted town meetings - perhaps I've missed something? The current system will die a slow death. In the interim, we can count on insurance increases 10-20% per year. But you are right, we can go without insurance altogether, since the law that requires it is unenforcable. Thank you for your thoughts.
Darwinia
Sun, Nov 13, 2011 : 10:38 p.m.
"Tony - What would be an acceptable hourly rate for unskilled home care that would satisfy the AnnArbor.com Editorial board?" Really? Would you want your wages to be decided by the government? Many who work in the direct care field are long term employees who are just as skilled and passionate as anyone with a bunch of letters after their names. When this "reform" sets rates for insurance, and offers the choice of unlimited coverage it might stop smacking of anything other than auto insurance backed hypocrisy. I am really starting to think that the model for this "reform" is the insurance commercial where the robots provide the day care. "There will be opportunites in debate to improve upon this bill; this is the closest we've come to a solution - yet the opinion of AnnArbor.com is to abandon the bill in it's entirety and allow rates to increase along with uninsured drivers, correct?" A bill that is another in a growing list of pro-industry legislation that abuses appropriations to make it referendum proof is not something that its authors are looking for debate on. If this were good legislation, it would have made it out of committee by more than one vote, and there would have been and continue to be town meetings in every part of the state about it. Instead it has been rushed and we've been flooded with misleading commercials in-between the constant auto insurance commercials. As far as uninsured drivers, they happen because they can. The last thing on their mind is PIP as the reason why they buy insurance for a month or two, register their vehicle and dump their insurance. There are no consequences for that. Insurance is not their priority and this legislation WILL NOT CHANGE THAT.
dswan
Sun, Nov 13, 2011 : 3:57 p.m.
Johnnya2 - For motorists without health coverage, the answer is Medicare, at least for now. This may change as Health Reform gains momentum and we're all required to have some form of health insurance. Your second point is spot on - providers are allowed to charge Auto Insurers four times higher than what they would charge a workers comp claim. This is why the Michigan Health and Hospital Association is rallying against this bill. Is there motiviation to increase profits just because they can legally or are the costs allowed under workers comp and Medicare so low that they need to fill the gap where ever possible? Either way, it shouldn't fall on drivers to cover it.
dswan
Sun, Nov 13, 2011 : 3:50 p.m.
Tony - What would be an acceptable hourly rate for unskilled home care that would satisfy the AnnArbor.com Editorial board? Is this the only example and therefore the crux of why AnnArbor.com rejects this bill? There will be opportunites in debate to improve upon this bill; this is the closest we've come to a solution - yet the opinion of AnnArbor.com is to abandon the bill in it's entirety and allow rates to increase along with uninsured drivers, correct?
Tony Dearing
Sun, Nov 13, 2011 : 2:43 p.m.
common_cents, one example would be that the bill says that for in-home care, payment for basic care would be limited to $11 an hour. We favor reasonable cost controls, but provisions like that, written into the bill, go too far in our point of view. While some of these provisions could be addressed in the legislative process, we still couldn't favor the bill if it isn't more consumer-oriented. Supporters of the bill say even though it doesn't require the cost savings to be passed along, the ultra-competitive market for auto insurance would force insurance companies to reduce their rates, and that's a valid argument.
johnnya2
Sun, Nov 13, 2011 : 2:25 p.m.
"The current system forces insured to pay duplicative costs - health and auto insurance premiums for the same coverage" Interesting. Some of those people do not have health insurance. Where do they get coverage? And before I hear Medicaid, what happened to wanting these things handled on the STATE level not from the Feds. There is a need for reform, but doing away with the MCCA is not one of them. Negotiating medical payments would be the answer. If a doctor charges an MCCA patient 4 times what they charge a workers comp patient, they need to reform the provider end of the coverage.
dswan
Sun, Nov 13, 2011 : 2:02 p.m.
I apologize for the above typos...to continue where I left off: When the MCCA has been overfunded in the past, a refund is provided to insureds via a credit on their policy. The last time this happened was in the 1990's, if I recall correctly. Insurance Companies are not evil enterprised attempting to take your money. They provide a valuable service, protection of your assets. Not to mention a business product sold by thousands of small business owners (agencies). In Michigan, they are barely breaking even, unable to measure risk to do unlimited medical benefits. Other states, such as Florida, have seen provider pack up and leave, reducing competition and raising rates for all - is Michigan next?
AlfaElan
Sun, Nov 13, 2011 : 1:45 p.m.
The only problem I have with No Fault insurance in Michigan is the MCCA does not appear to be run as Re-Insurance. So every year they raise of lower the rate depending on last year. This has led ot overcharging one year then later refunds. If they contracted with a Re-Insurance company this would likely be evened out to be a much more consitent rate. I would be up for better running of the MCCA, but the No-Fault system works very well otherwise, and I much prefer it to states where you have to sue to get your compensation. It is interesting how few people look at the high percentage of their premium goes to the MCCA. This is also one reason I am against the push for allow motorcylist to ride without helmets. A helmetless motorcylcist is more likely to have injuries that exceed the limit where the MCCA fund cuts in thus every motorist would be paying for the riders care. If they allow motorcylcist to ride without helmets as long as they paid for over $1million of insurance I'd be more for it since the rider would be paying for the catastrophic care not me.
Darwinia
Mon, Nov 14, 2011 : 7:24 p.m.
Grr, these responses were to what Common_cents wrote further down. I'm not sure how I landed them here, but my apologies for any confusion.
Darwinia
Mon, Nov 14, 2011 : 7:19 p.m.
"Any sort of set fee payments would" The end cut off, should read Any sort of set fee payments would have to be realistic to traumatic situations.
johnnya2
Sun, Nov 13, 2011 : 2:15 p.m.
After these people get the no helmet through, I want to know how long it will be before seat belts are no longer required. Those who scream freedom, I need to remind them you do not have the RIGHT to ride a motorcycle, you must be licensed. You must be insured. You do not have the freedom to drive drunk. A helmet is just another requirement. By the way, this law is not only about the motorcyclist. My mother was driving when her car was hit by a motorcyclist without a helmet. He had run a red light. The image of seeing his head split open on the pavement haunts her to this day. The police and paramedics all say it was likely he would have survived his injuries had he worn a helmet.
dswan
Sun, Nov 13, 2011 : 1:56 p.m.
The new riders without a helmet law requires a the rider to carry a minimum amount of injury protection coverage. The minimum is set high, so high that many riders consider it unaffordable (I don't have the number - sorry). Allowing riders without a helmet is ridiculous. All it takes is one tragic accident to demonstrate that this bill is a mistake and there would be many.
Tony Dearing
Sun, Nov 13, 2011 : 1:54 p.m.
One of the less talked about elements of HB 4936 is that a person injured on a motorcycle could only claim benefits up to $250,000, whereas someone driving a car can get benefits up to $5 million if they buy that level of coverage.
townieA2
Sun, Nov 13, 2011 : 12:12 p.m.
Thanks Annarbor.com writers for bringing this to voters' attention. This is driven by the insurance industry, and would drastically change Michigan's no-fault law. While it is true that curtailing medical costs is essential, this is the wrong way to go about it because it is very anti-consumer friendly. PLEASE become informed on this Michigan voters. Don't be fooled by flashy TV ads paid for by the insurance industry.
Mush Room
Sun, Nov 13, 2011 : noon
There's just no such thing as a free lunch. If long term auto injury related costs are pushed to the Medicaid program, we still pay, but this time with tax dollars. This is really bad legislation that serves insurance companies and no one else.
Basic Bob
Sun, Nov 13, 2011 : 11:45 a.m.
While it is possible that the MCCA is sitting on a pile of secret cash, in all likelihood they have tried to set aside enough money to cover their future costs. Lifetime care for someone with a traumatic brain injury costs a huge amount. In the event that no-fault or unlimited care is eliminated in the future, the insurance companies and MCCA would still need to cover the thousands of past injury victims already in their care. For us to rip the money out of MCCA's hands now would jeopardize that protection, much as the federal government interference has done with the Social Security benefit. While I am all in favor of eliminating no-fault insurance as being just too expensive, I question whether government oversight could force the MCCA funds to be returned to the insurance companies as a gigantic windfall, stealing from both victims and policy holders.
Tony Dearing
Sun, Nov 13, 2011 : 1:20 p.m.
Bob, one point I should be clear on. Under House Bill 4936, the changes to no-fault would apply to people who are injured in accidents after July 1, 2012. Past injury victims would continue to receive unlimited, lifetime benefits.