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Michigan, through its one of a kind no-fault automobile insurance law, is the only state in the country that provides unlimited medical benefits to citizens who are seriously injured in an automobile accident.  Republicans have been attempting to reform this law, for the benefit of insurance carriers, for a long time.  This is true, despite the fact that the 43 year old law has served Michigan citizens well, is working just fine (except that insurance companies tend to wrongfully terminate benefits too often), and does not need to be reformed, at least, not in favor of insurance companies.

The latest dastardly effort is being spearheaded by Republican State Senator Joe Hune, and, last week, a divided state Senate rushed through a confusing bill that backers say would curtail costs and limit fraud.  Here’s the problem:  Assuming that the legislation does “curtail cost”, the bill offers no corresponding rate relieve for citizens.  When the bill speaks of “fraud”, it says and does nothing about fraudulent claims handling by insurance adjusters, wrongful denials of benefits or dishonest medical evaluations performed by physicians who make million working for insurance companies.  So, a citizen of Michigan should be asking:  Why is my state senator rushing this bill through the legislature when the only changes being made benefit insurance companies?

Want to know how fast this bill went through? Many decision makers have said that they had no chance to read important provisions; a Senate Insurance Committee meeting notice on the bill was posted on Tuesday at 4:59 p.m., less than 24 hours before the hearing took place on Wednesday at 12:30 p.m. The Republican-led Senate voted 21-17, mostly along party lines, to move the legislation to the House after only five hours of closed-door meetings and debate on the floor. Democrats unsuccessfully sought 17 amendments, including some that would have required auto insurers to cut premiums.

Senate Bill 0248 would:

  1. Cap how much no-fault insurers would have to pay out to doctors and hospitals to the average of what commercial health insurers pay.
  2. Create a new entity to replace the Michigan Catastrophic Claims Association (MCCA), which is funded with a $186 annual per-vehicle fee assessed on drivers and covers severely injured motorists whose medical bills and rehabilitation costs exceed $530,000. The MCCA’s annual per-car assessment will drop to $150 starting this summer.
  3. Limit home care reimbursement for people recovering from their injuries with maximum $15 per hour for a maximum of 56 hours per week, regardless of experience or skills.
  4. Establish an insurance authority to investigate fraud in the no-fault system, but only on the claimant side.

Changes to No-Fault and the Michigan Catastrophic Claims Association would hurt Michigan’s economy and hospitals, shift health care costs to Medicaid, and financially devastate critically injured auto accident victims. Establishing a “one-sided” insurance authority to investigate and crack down on fraud and abuse doesn’t provide any oversight for insurance companies who have been proven in the past to be guilty of fraud and abuse, too. And, why would it?  The fraud authority would include a 15 person board with eight of those people appointed by the insurance industry.  The bill would put price controls on healthcare providers, but provide no economic relief to insurance customers.  There is only one reason legislators had less than 24 hours to review the bill and weigh in – because Senate Bill 0248 clearly favors insurance company profits, while offering no rate reduction for policyholders and robbing victims of the care they pay for in premiums.  State Senator Rebekah Warren, whose own sister depended on the state’s insurance system after a horrific accident said it best: “The cracks that start today undermine the system forever.”

Thankfully, most of us have never been involved in a catastrophic accident.  It is a life-changing and view-altering experience.  Republican Oakland County Executive, L. Brooks Patterson, who was serious injured in an auto accident changed his view on Michigan’s no-fault law after his accident. It took debilitating injuries and personal experience to make him a believer in the current law and he has openly criticized recent attempts to limit the medical and medical service benefits it provides.  It is sad that a Republican politician has to become an injured or disabled citizen to champion the rights of injured or disabled citizens, but Patterson had a powerful message for his fellow Republicans the last time they attempted to “fix” the unbroken no-fault system  Here is an excerpt from “An open letter from Oakland County Executive L. Brooks Patterson,”:

A perception has been cast that there is a need to change Michigan’s Auto No-fault insurance system despite the fact that citizens of this great state have already voted twice to maintain the country’s best coverage for auto accident victims… the system is working as it was originally intended and any attempt to change the current law without having independent third party financial information is reckless and would result in damage to Michigan’s economy, shift millions of dollars of cost from private insurance to Medicaid and destroy the livelihood of Michigan’s catastrophically injured auto accident victims.

Here are some other key points of his letter:

  • Making changes to our current auto no-fault system without any real and validated data that substantiates the existence of a real problem is reckless and jeopardizes the balance of our entire statewide health care system.
  • The changes pander to the insurance industry, while ignoring basic consumer safeguards that ought to be part of any reform effort.
  • Over time, the kind of reform being contemplated could shift billions of dollars in medical costs from insurance companies to taxpayers. The result would be a massive shift to Medicaid.

Senate Bill 0248 is a bad deal for Michigan citizens. Don’t let a tragedy strike your or a loved one before you learn the truth. If you or a loved one were the victim of a serious auto accident, would you want your life voted on in less than 24 hours? Lawsuit Financial encourages everyone to read the bill in order to fully understand the potential consequences. Help protect Michigan citizens by contacting your State Representative and urge him or her to VOTE NO on this bill. The House Insurance Committee’s scheduled hearings are Tuesday, April 21 and Thursday, April 23 in Lansing.

Mark Bello is the CEO and General Counsel of Lawsuit Financial Corporation, a pro-justice lawsuit funding company.

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