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Earlier this week, I wrote about how the Michigan auto insurance industry has been lobbying our elected officials in an attempt to break its decades-old promise of providing lifetime medical benefits to victims of auto accidents. Due to mounting public pressure, two bills aimed at capping medical benefits, SB 293 and SB 294, have been essentially abandoned. Unfortunately, a substantially similar bill has just been introduced in the Michigan House of Representatives – HB 4936. The upshot is that Michigan’s model No-Fault System is still under attack. Maybe insurance companies were hoping no one would notice.

Another thing insurance companies are hoping we don’t notice is their increasing profitability. Due to lackadaisical regulation (and protection from conservative state courts), Michigan auto insurance companies are charging among the highest premiums in the country, and basing them on irrelevant factors such as credit scores and residence addresses. In 1972, insurance companies promised lower rates if the No-Fault system was adopted, because there would be less litigation to determine entitlement to medical benefits. In reality, insurance companies raised premiums almost immediately, claiming they had “miscalculated” the effect of the legislation. And while premiums have been climbing, serious car crashes (and resulting insurance claims) in Michigan have been dropping, due in part to recently enacted aggressive traffic laws. So auto insurance companies are charging more, paying out less, and lining their coffers with the difference.

If insurance companies do get their way, and medical benefits for auto accident-related injuries are capped, and they retain the threshold injury protection from tort liability, how will an accident victim’s medical bills be paid? Taxpayer-funded government benefits such as Medicare and Medicaid will take on a huge share of this burden. A recent study found that Michigan’s Medicaid system will face an additional $30 million in costs in the first year alone if the proposed changes to the No-Fault system are adopted.

Now is the time for Michigan residents to say “enough is enough.” Insurance companies cannot be permitted to cash premium checks while avoiding any meaningful responsibility for liability.

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