House Dems: No Fault Overhaul Fails Drivers, Accident Victims

Senate bills erode medical care, lack guaranteed rate reductions
Wednesday, April 29, 2015

LANSING – House Democratic Leader Tim Greimel (D-Auburn Hills), Detroit Caucus Chair Brian Banks (D-Detroit) and Rep. Tom Cochran (D-Mason) said today House Democrats cannot support Senate Bills 248 and 249 because they erode medical care for certain victims by limiting their ability to pay for their care, they do not guarantee rate reductions, and they create more bureaucracy and continue secrecy while prohibiting voters from expressing their opinions of the so-called reforms at the ballot box. A recent poll conducted by the Michigan Health and Hospital Association found that a wide majority of respondents do not support these changes to no-fault.

“The devil is in the details. This no-fault bill is a massive handout to insurance companies at the expense of motorists and patients,” said Greimel. “We shouldn’t be sacrificing the care seriously injured people need just to pad insurance company profits.”           

Senate Bills 248 and 249 include provisions to reduce insurance premiums by $100 per year per vehicle but only for two years. This provision does not address the current excessively high rates paid by urban drivers, particularly in Detroit, who pay some of the highest premiums in the state.

“This plan will have rate payers footing the bill for the generous payouts that insurance companies will still receive,” said Banks. “A $100 rate cut for two years won’t go far when you’re paying thousands of dollars for insurance premiums. These bills dismantle what’s good about our no-fault system and still fail to address excessive rates which are unaffordable for many drivers.”

The bills also limit attendant care for seriously injured people to $15 per hour, potentially forcing families trying to provide care for a family member into bankruptcy. Rep. Banks won an amendment to the bill in committee stating that the $15 limit does not apply if the family member providing care is a licensed medical professional.

“We heard story after story from accident survivors and their families about how these bills would deny them the care they need to have the best quality of life possible,” Cochran said. “We believe that if you’re injured, you should spend your time recovering with loved ones instead of fighting with your insurance company for denying you care. It is irresponsible to even consider bills that further victimize survivors of auto accidents.”

While creating a new Michigan Catastrophic Claims Association (MCCA) that will be transparent and subject to the Open Meetings Act, this plan allows the current MCCA to continue operating in secrecy while it pays out claims now in its system. The plan contains a $150,000 appropriation which makes the bills referendum-proof because voters cannot vote on appropriations. Voters have rejected changes to no-fault at the ballot box twice before.

“This is bad policy that's being rushed through the Legislature,” said Greimel. “These changes will hurt Michigan families. My Democratic colleagues and I will fight hard to stop these bills and instead seek reforms that preserve high quality care while reducing insurance rates.”