By Bridge Michigan
Auto accident victims and providers could make another attempt to change Michigan’s no-fault auto insurance law when Democrats take control of the legislature in January.
A 2019 law that introduced major changes to Michigan’s insurance policies gave drivers the ability to choose coverage levels. The reform was expected to reduce the nation’s highest cost of auto insurance and reduce average premiums from $3,096 in 2019 to $2,639 in 2021.
But the law also cut by 45 percent the amount healthcare providers could charge for reimbursements for accident survivor services not covered by Medicare — a change proponents say hindered patients’ access to quality care.
A total of 4,082 healthcare jobs have been eliminated since 2021, while 6,857 accident patients have been laid off from care since the policy went into effect, a study by the Michigan Public Health Institute found.
Gov. Gretchen Whitmer said she expects talks about ways to amend the law could begin early next year. “There is still a lot to be done here to ensure injured people get the support they paid for. I am interested in pursuing this further.”
The Michigan Catastrophic Claims Association — an industry-led nonprofit that collects annual fees from Michigan drivers to cover medical expenses for accident victims — reduced its fees and, at Whitmer’s urging, issued reimbursement checks for $400 per vehicle after 2019 to Michigan drivers out of law.
The association recently raised its new annual ratings per vehicle to a minimum of $48 per vehicle per year after a recent Court of Appeals decision found that patients who began treating auto injuries before the passage of the 2019 law did not subject to change. This judgment is being appealed.
Although reform advocates say the ruling has eased some of the pressure, they are still pushing for changes to the law. “What we’re really looking for is a legislative solution that makes all of this moot, and we can just restore continuity of care to accident victims,” said Tom Judd, president of the Michigan Brain Injury Provider Council.
Rep. Julie Rogers, D-Kalamazoo, is a physical therapist who has worked with people who have been catastrophically injured and a longtime advocate of legislation to adjust the fee schedule set out in the 2019 Act.
“Auto no-fault problems are life and death,” Rogers said. “For me, that’s high on the list of things to fix.”
Supporters of the existing law argue the changes were a difficult but necessary compromise to bring down costs.
In a statement to Bridge Michigan, Insurance Alliance of Michigan director Erin McDonough said the 2019 reforms have made insurance more affordable for tens of thousands of drivers and mean Michigan is no longer the most expensive state to buy auto insurance.
Ensuring those injured in auto accidents receive medically necessary care remains a priority for insurers, McDonough said, adding that the 2019 law was Michigan’s first attempt to create checks and balances for medical expenses.
“We are urging a broader look to ensure savings for Michigan consumers remain protected while the Legislature and Governor seek an assessment of the reforms,” she said.
If Whitmer and the new lawmakers are able to come up with a solution that changes the law without hurting the savings, current House Speaker Jason Wentworth said he had no problems – but none of the plans put forward so far would do, he said.
He does not plan to raise the issue during the legislature before the new term begins next year.
“If there’s a sweet spot to fix the perceived problem, I’ve been willing to look at that since day one,” the Clare Republican said. “I’ve never been presented with a plan that actually fixes that and still makes the savings. And if they can tackle the next semester, then great.”
William Bruck, a Republican elected representative from Erie whose home care business had two customers affected by the policy change, said one of his priorities is looking at ways to fix laws that have “good intentions” to themselves but have a negative impact on businesses and residents.
The 2019 law “had some good results as more people now have auto insurance, but it also had some negative effects,” he said.
“We don’t handle a lot of car cases, but we had two clients in particular whose rates were cut almost 60 percent so we couldn’t attend to them,” he said. “We’re not alone in this … I’m definitely willing to check that out.”
Rogers said that while she believes the primary focus should be on the needs of accident victims and the people who provide their care, it’s worth considering other changes that could make auto insurance cheaper.
“The whole focus of why this was done in the first place was primarily on the insurance rates, right?” Rogers said. “The intent of changing the law, the lower rate for everyone, hasn’t really come into effect and so I think we still need to look at ways to bring costs down.”