The Michigan state senate has passed a package of bills that would modify four-year-old reforms to the state’s no-fault automobile insurance law.
Health care providers said they believe the reforms went too far, leaving seriously injured people without appropriate care. Supporters say motorists needed a break from the nation’s highest insurance costs and the new legislation would undo that progress.
S.B. 530 and 531 revisit reimbursement under the Medicare fee schedule, establishes consistent rates among providers, creates a new non-Medicare fee schedule for fair rates and addresses home care limitations, supporters said.
The legislation would eliminate the various rate tiers for reimbursement and coalesce hospitals around the national median reimbursement rate of 250% of Medicare, the Michigan Health & Hospital Association said.
“As we’ve witnessed the devastating effects of the 2019 auto no-fault changes, I firmly believe we cannot afford to sacrifice health care in the name of ‘rate relief’ that never actually came,” said state Sen. Jeremy Moss. “It is our responsibility to try to restore some of what was lost and ensure auto accident survivors have access to the high-quality care they need.”
The National Association of Mutual Insurance Companies said lawmakers should give the 2019 reforms more time to work.
“NAMIC supports the bipartisan agreement on auto no-fault reforms from 2019 and urges lawmakers to have thorough and thoughtful conversations before they begin changing or unraveling what was previously agreed to,” said Andrew Perkins, NAMIC’s regional vice president, Great Lakes. “Those reforms appear to have succeeded in reducing the cost of auto insurance to some extent. It is important to remember that pre-reform, Michigan had the most expensive auto insurance in the country, and more time and experience are needed to let the reforms work.”
The legislation would put the state on a path toward rising insurance rates, increased catastrophic claims assessments and less coverage for lower personal injury protection levels, said Senate Republican leader Aric Nesbitt.
“Increased rates and less competition in the marketplace are not solutions to the struggles Michiganders are facing under the weight of higher costs of living and historic inflation,” he said. “Rising insurance rates will harm hardworking people trying to make ends meet and lead to more uninsured drivers on our roads.”
The bill now is in the hands of the House of Representatives.
The top five writers of all private passenger auto, based on 2022 direct premiums written, in Michigan were: Progressive Insurance Group, with 20.49% market share; State Farm Group, with 18.11%; Auto Club Group, with 13.76%; Auto-Owners Insurance Group, with 10.82%; and Allstate Insurance Group, with 7.44%, according to BestLink.