All House Democrats Say No to “D-Insurance” Plan for Detroit Drivers

Plan restricts medical coverage in policies to $250,000
Tuesday, June 9, 2015

LANSING – House Democratic Leader Tim Greimel (D-Auburn Hills), state Representative Tom Cochran (D-Mason), minority vice chairman of the House Committee on Insurance, House Insurance Committee member and Detroit Caucus Chair Rep. Brian Banks (D-Detroit), Assistant Democratic Leader Rep. Fred Durhal III (D-Detroit) and Rep. Sherry Gay-Dagnogo (D-Detroit) said today that the Senate plan to cut auto insurance rates for Detroit drivers by severely limiting coverage available for accident victims is a bad deal for Detroit drivers. Senate Bill 288 would do away with the unlimited coverage offered in no-fault policies and limit benefits for critical care to $250,000 for the policy holder, his or her spouse or a relative of either living with them, and limit other personal protection benefits to $25,000. After those limits have been reached, it would be up to policy holders to find other insurance to cover remaining medical costs. This kind of policy would only be available to people living in cities with at least 500,000 residents and that meets other criteria, or that can demonstrate that 35 percent of its residents are driving uninsured.

“This cheaper insurance policy targeting Detroit residents, and others who would qualify, limits needed medical care and compromises families’ long-term financial security. That isn’t a good deal for any of Michigan’s residents,” said Greimel. “Limiting medical care coverage is not an acceptable way to address the high cost of no-fault insurance, particularly in Detroit.”

Known as “D-Insurance,” Senate Bill 288 was written primarily for Detroit drivers. It would not only cap catastrophic care benefits, but also allow insurers to require policy holders to create a limited provider network and force policy holders to receive post-acute care from an in-network provider as well as obtain preauthorization from the insurer.

“Detroit residents don’t deserve to be treated as second-class citizens when it comes to no-fault insurance,” said Banks. “Detroiters unfairly pay excessive rates for the car insurance they have to buy. But paying less for a policy by giving up unlimited catastrophic medical care, and allowing your insurance company to second-guess the care decisions made by your doctor, puts people in a no-win situation. Under this ‘D-Insurance’ policy, the D would better stand for ‘debilitating,’ because that’s what would happen to victims instead of recovery from their injuries. If we are concerned with real rate reduction, let’s put a stop to red lining by removing zip code, credit score, occupation and education from the list of factors that can influence rates.”

The Senate voted SB 288 out of the Senate Committee on Insurance today, and it awaits action from the full Senate.

“As a former firefighter and first responder, I’ve seen what can happen in a car accident. As the minority vice chairman of the insurance committee, I’ve heard first-hand from accident victims on how long they’ve spent in hospitals and rehab units,” said Cochran. “This ‘D-Insurance’ plan makes an unacceptable trade for a cheaper car insurance policy while ignoring the overall issue of the unfair prices, and that’s why my colleagues and I can’t support SB 288.”

“You get what you pay for, and under D-Insurance, everyone knows you wouldn’t get much medical care for a catastrophic injury for $250,000,” said Durhal. “Detroit residents struggle to pay for car insurance, but under SB 288 they would end up struggling to pay medical bills or trying to find affordable insurance when their benefits run out. This plan intends to make insurance more affordable for Detroiters, but it could lead to a bad situation that is worse for Detroit drivers.”

“SB 288 in its current form is bad for Detroit citizens,” said Gay-Dagnogo. “To ensure affordable insurance rates in the City of Detroit, we must work with all stakeholders, ensuring they are a part of the process of developing viable options and bipartisan bills that protect auto no-fault.”