It was a virtual all-nighter for the Michigan State House of Representatives as they shoveled the coal onto efforts to find some way to reform the highest automobile insurance rates in the entire nation overnight. They finally passed their version of the legislation in the early morning hours of today, Thursday, May 9th, but it's different from the version passed by the State Senate earlier in the week.
State Representative Pauline Wendzel says she and her colleagues successfully passed an auto-insurance reform package that will provide consumer options and deliver rate relief for all Michigan drivers, telling us, “For decades, the Legislature has tried and failed to reform our broken auto-insurance system. Tonight, we have succeeded where so many previous attempts have failed.”
The House legislation includes several choices for motorists to choose from in personal injury protection coverage – totally opting out of PIP, which would result in a 100-percent guaranteed rate reduction in the PIP portion of the insurance bill, and a $50,000 coverage plan that is accompanied by a guarantee of 80-percent reduction in the PIP portion of the insurance bill. The legislation would also offer a $250,000 coverage option that would also result in a 60-percent reduction in PIP costs; a $500,000 plan that comes with a 30-percent reduction in PIP; and an unlimited medical benefit option similar to what is offered now under the no-fault system. This option would guarantee a 10-percent rollback in PIP rates.
Wendzel says, “I wanted to thank Speaker Chatfield and Representative Wentworth for the open and transparent process we’ve had in the House," adding, “I relayed the comments and concerns I had heard on the doorsteps of so many people in our community to ensure that Southwest Michigan had a strong voice in this process.”
State Rep Beth Griffin of Mattawan says, “I’ve heard the concerns of Southwest Michigan drivers and their families loud and clear,” adding, “Car insurance costs too much – and we’ve got to do something to make it more affordable. Fee schedules to stop overbilling, consumer protections to fight fraud, and more coverage options to provide personal choice – all of these changes will help rein in the runaway costs of car insurance. It’s past time to give families some financial relief.”
Michigan’s costs are high largely because it’s the only state mandating unlimited lifetime health care coverage through car insurance. The House plan allows those currently using the coverage to keep it, and those who want it in the future to continue buying it – while providing a more affordable option.
In addition to the coverage options, the House legislation also installs the workers’ compensation fee schedule on what insurers would pay health care providers for various procedures. The plan would also end the double tax on seniors who are already entitled to Medicare or have lifetime retiree health care. The House also included an amendment that states after the five year mandate rate rollback, Michigan would move to a “file and approve” system for auto insurance company policies rather than a “file and use” system, giving regulators greater authority to reject rate increases.
The sweeping legislation now advances to the Senate for further consideration, where they will accept or modify the changes to find consensus before sending it on to the Governor who already indicated earlier in the week that she would veto the Senate version.
The House bill was introduced last evening and was amended multiple times through the night before finally being passed at 2am. Stay tuned. The deal isn't done yet.