Auto insurance

Commentary: On auto insurance, lawmakers have listened

A recent opinion piece by Tom Judd of the Michigan Brain Injury Provider Council (Crain’s, September 12) falsely claims that lawmakers are sitting idly by while the sky is falling over the 2019 bipartisan no-fault automobile reforms. That couldn’t be further from the truth.

Michigan’s outdated automatic no-fault system was a welcome mat for fraud, encouraging the overloading and overuse of medical services by hospitals and other medical providers. Worse, Michigan was also the only state in the nation to require drivers to purchase unlimited lifetime medical benefits with their auto insurance policy – ​​the main culprit for Michigan’s exorbitant auto insurance premiums.

Lawmakers listened, and the 2019 reforms brought much-needed relief to Michiganders. Recently, more than 7 million insured Michigan drivers, including statewide businesses with vehicle fleets, received the largest reimbursement in state history. The Michigan Catastrophic Claims Association’s $400 per vehicle reimbursements would not have been possible without these bipartisan reforms, which have saved Michigan drivers about $5 billion so far. Once the most expensive state in the nation for auto insurance, reforms have helped lower Michigan rates, as evidenced by a recent ranking of auto insurance by state and data from the Department of Insurance. and mandatory bodily injury financial services. protection reductions.

Because lawmakers listened, more Michigan residents are buying car insurance than ever before, with more than 202,000 new drivers buying car insurance since the reforms took effect. More than 50 new insurance companies have entered the Michigan insurance market, further driving down costs by creating competition – another win for consumers.

Acknowledging changes were being made to a broken system that hadn’t been updated in nearly 40 years, lawmakers listened by creating a $25 million appropriation in 2021-22 for the long-term care industry. duration. This would act as a stopgap for companies that were struggling to make the transition, but today only one organization has fully fulfilled the request. DIFS has created a rapid response program to ensure that no one in need of care is missed. The system has seen 126 formal attendant care complaints filed with DIFS since July 1, 2021, of which 119 have been resolved.

The Legislative Assembly has tackled the issue of auto insurance reform without regard to liability for either medical providers or insurance companies. Lawmakers listened to their constituents who were struggling to afford car insurance. The escalating cost of insurance was the direct result of a system that allowed medical providers to charge for their services without limit. This has created an industry in Michigan that does not exist anywhere else in the country. When you get unlimited benefit and unlimited amount that can be billed, you end up with an unaffordable and unsustainable system, which is way outside the scope of the normal medical system. But don’t take the Insurance Alliance of Michigan’s word for it. The preponderance of the data that exists on this issue – the data that led the legislature to take steps to try to control this system – is considerable.

Contrary to Judd’s assertions, heaps of evidence illustrating this out-of-control system has been provided in the testimony of the Michigan Catastrophic Claims Association and the City of Detroit, and exposed and studied by outlets like the Detroit Free Press. The non-partisan Citizens Research Council has also produced a report on the subject. Here are some examples of this abuse: Medical providers charge $3,200 for an MRI when billed to auto insurance, but the same MRI by the same doctor at the same facility only costs $500 when billed to Medicare. Read the testimonials for more examples of this surcharge and it’s no wonder Michigan has the most expensive auto insurance in the nation.

The problem is not access to care for injured claimants, but that of providers demanding a certain level of compensation from insurers. Before and after the 2019 reforms, insurers remained required to pay for reasonable and medically necessary care for people injured in car crashes in Michigan.

Despite the efforts of some to roll back the time for reform, the facts and data compel us to acknowledge that lawmakers have listened. Their bipartisan reforms have created cost savings, cracked down on fraud, reduced overcharging and given choice to Michigan consumers. We urge lawmakers in both parties to stay the course and let these reforms continue to work.