One of the many people who are working to ensure that Republicans do not hand a gift to insurance companies by “reforming” our state’s auto insurance laws wrote to Governor Rick Snyder. They asked him to veto any changes to our current law that would remove the requirement for lifetime benefits in the event of catastrophic injuries sustained in a car accident. As I wrote last week, this so-called “reform” is nothing more than a gift to auto insurance companies that not only will not save Michigan consumers money but will, in fact, increase our costs.
Michigan’s no-fault auto insurance is the GOP’s current target for reform. In what can only be described as a gift to auto insurance companies, they are looking to remove the requirement for unlimited lifetime coverage for victims of auto accidents. The claim is that this will save Michigan insurance purchasers (i.e., auto owners) so much money that our pockets will be filled and the world will be set right once again.
Problem is, it’s a bunch of lies. The fact is that, outside of Metro Detroit, the average cost to Michiganders for auto insurance is similar to the national average of $1,000 per year or less for a single vehicle. However, if a person is involved in a catastrophic car accident requiring lifetime care, the proposed lifetime cap will shift the costs to our social welfare system, ensuring that all of us pay more in the end. In fact, according to a recent study, Michigan Medicaid costs could rise by $30 million in the first year if this cap goes through.
The response this person got back is such a non-committal one that it deserves to be public:
Thank you for your recent email regarding reforming auto no-fault insurance in Michigan. Governor Snyder appreciates your concerns and ideas as we move forward, reinventing Michigan. The governor asked that I respond on his behalf.
The Michigan Catastrophic Claims Association (MCCA) was established by Public Act 136 of 1978, which amended Michigan’s no-fault law. Created by statute, the MCCA is a private, nonprofit association. All of its dealings are with insurance companies, not the general public. The MCCA is funded by charging an assessment to every Michigan auto insurance premium. The assessment funds a pool of money for catastrophic medical costs resulting from an auto accident. Michigan is currently the only state that covers a claimant’s lifetime medical expenses in the case of a catastrophic auto accident. The MCCA assesses a fund on insurance companies that write policies for auto insurance in Michigan. In some cases, the insurance company may pass on this cost to the policyholder.
Some residents have long-term disability insurance that cover expenses in the case of a debilitating auto accident, but most do not. There is speculation that insurance companies are “double-dipping” since most auto insurance policies already cover personal injury protection. However, auto insurance companies reimburse a certain amount ($500,000 beginning July 1, 2011) and then the MCCA covers the remaining expenses.
Additionally, in 1992 and 1994, Michigan voters rejected ballot proposals to eliminate mandatory unlimited medical coverage. In spite of the promise of lower auto insurance premiums, the proposals were rejected – two elections in a row. If this issue were to come up as a referendum on the ballot again in the future, the governor will stand behind whatever decision is made by the majority of Michigan residents.
Section 500.3104 of the Michigan Insurance Code is the governing document outlining the objectives and provisions of the MCCA. Any changes to the Michigan Insurance Code must be made through the legislative process. Article IV, Section 22 of the Constitution of the State of Michigan of 1963, as amended, states that “all legislation shall be by bill and may originate in either house.” In the State of Michigan, the governor does not have the ability to introduce legislation. If a bill is passed by both houses in identical form, the bill is enrolled and sent to the governor’s desk. As governor, he would have 14 days to make a decision on such legislation. With that being said, the governor does believe there must be a broader effort to reform vehicle insurance that takes into consideration the best interest of all Michigan citizens.
Please be assured that should related legislation come before the governor for final signature, he will be certain to keep your views close at hand.
Again, thank you for sharing your comments with Governor Snyder on these important matters. Should you have any further comments or concerns regarding this or any other matter, please do not hesitate to contact our office.
Constituent Relations Division
Executive Office of the Governor, Rick Snyder
Nowhere in the response does Gardner indicate how the Governor feels on the issue and whether or not he will sign the legislation if it is passed by our legislature. The bit that I highlighted is particularly galling because, as I wrote in my previous piece, there will be no referendum. The Republican authors of this legislation have seen to that.
The House bill, HB 4936 sponsored by Rep. Peter Lund, also has a little suprise tucked into it in the form of a $50,000 appropriation for a “study” on the effect of the new law. Why did he put this in there? Because appropriations bills are not eligible for citizens’ referendums where they are put on the ballot for Michigan citizens to vote on. Citizens’ referendums on our no-fault insurance rules happened in 1992 and 1994 when voters smacked the “reforms” down. Lund, Hune and their Republican friends in the Legislature don’t want any chance of that happening again.
If you’d like to learn more about this new legislation, I commend your attention to the website of the Coalition to Protect Auto No-Fault (CPAN). There you can keep up to date on the bill, learn the facts about this GOP gift to insurance companies and find out how you can take action. There are links there for contacting your state legislator. PLEASE TAKE A MOMENT TO CALL YOUR LEGISLATOR AND TELL THEM TO VOTE NO! ON THIS BILL.