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| Grewal Law, PLLC

Over the past six weeks, I have blogged about some proposed changes to Michigan’s No-Fault insurance laws. The current version of the bill, HB 4936, has two major anti-consumer components. First, the new law would end the greatest feature of Michigan’s model No-Fault law: unlimited lifetime medical benefits for the care, recovery, and rehabilitation of injuries caused in an auto accident. Second, medical providers would be compensated using a fee schedule similar to that used in workers’ compensation cases, rather than a reasonable and customary amount. Needless to say, the extremely powerful auto accident insurance industry is lobbying heavily for the changes in order to increase their profits.

In place of the current system, the new personal injury protection scheme would impose caps on medical benefits. This is cause for concern because many motorists are likely to choose the lowest level of coverage possible. When that coverage is exhausted, taxpayer-funded alternatives such as Medicaid and Medicare are likely to pick up the bulk of the burden. According to one estimate, Michigan’s Medicaid health plans will face an additional $30 million expenses in the first year of the proposed new system.

For a lot of residents, this debate seems pretty abstract – something they don’t think they have to worry about. Of course, no one expects to be involved in a catastrophic auto accident. When this kind of tragedy does happen, however, medical expenses can destroy lives and families. Under Michigan’s current No-Fault system, the highest-priority insurance company is usually very easy to identify, and it is required to begin paying for medical care immediately without the need for or delay of litigation to determine fault. As a result, severely injured accident victims can receive the medical care they need.

As if HB 4936 wasn’t bad enough already, it also contains a miniscule appropriations provision. The sole purpose of the $50,000 appropriation is to make the law “referendum-proof” – voters would not be able to overturn the law without introducing a ballot initiative. Ballot initiatives require significantly more signatures than referenda.

It’s time for our legislators to put people ahead of corporations. Call your state representative and state senator TODAY and tell them to vote NO on No-Fault reform. You can’t afford to wait until tomorrow – it may be too late.


  1. Gravatar for Avenger

    I guess that the first question to ask is this:

    1) Does the insurance industry make ANY profits off the sale of No Fault insurance ? If they don't, then I don't blame them for seeking changes - after all, I would not voluntarily produce or sell any products that I would lose money in producing

    Here in Florida No-Fault it is a steady money loser, although that is largely the result of fraudulent and inflated claims - I suspect that if you could remove chiroquackters from the equation, and not allow them to assign impairment ratings, that most of FLorida's problems would be solved. I do not know the situation in Michigan but I suspect it is similar

    You commented "In place of the current system, the new personal injury protection scheme would impose caps on medical benefits. This is cause for concern because many motorists are likely to choose the lowest level of coverage possible. "

    This is a free country, or still pretends to be. I say let the consumer chose the level of self-protection they wish to purchase. If you wish to apply an element of compulsion to it, adopt a "pay for play" provision

  2. Gravatar for Jo

    According to the Detroit News: The MCCA also has asset reserves - are you sitting down? - of $12.9 billion. That's more than one-quarter the amount of Michigan's entire state budget.

    I have 8 vehicles and only 4 drivers. Obviously we cannot drive all of these vehicles at once. Why do I pay $144+ annually per vehicle rather and per registered driver?

  3. David Mittleman

    I can appreciate your concerns about the compulsory nature of automobile insurance. The fact of the matter is the biggest proponents of compulsory insurance are the insurance companies themselves. If drivers could choose NOT to be insured, the insurance industry would lose millions of dollars. The auto accident insurance companies want their cake and to eat it too... all motorists must purchase insurance and pay premiums, but the insurer wants to pay as little as possible. In the meantime, an injured patient will still require treatment, the cost of which will simply be borne by Medicare and Medicaid at the taxpayers' expense.

    In my opinion, a for-profit corporation should be willing to bear the risk of the obligations they make in exchange for a steady stream of revenue. Taxpayers should not be asked to bail out insurance companies to protect their profits.

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