Michigan State Capitol | Nick Manes
The latest version of draft legislation to overhaul the state’s auto no-fault law scraps mandated insurance rate reductions.
That’s despite allowing tiered plans that provide less medical coverage, according to a Republican memo obtained by the Michigan Advance.
Lowering costs for Michiganders was a fundamental part of previous plans. It was the reason why no-fault reform has had support from frustrated motorists, especially in Detroit, where people pay some of the highest premiums in the nation.
The push to alter Michigan’s one-of-a-kind no-fault insurance law is somewhat of a Lame Duck tradition. While there’s been an effort to scrounge up votes in the House, a spokesperson for Senate Majority Leader Arlan Meekhof (R-Grand Haven) reiterated on Tuesday that he’s not interested in taking legislation up.
Quicken Loans founder Dan Gilbert has been behind the latest plan to offer new auto insurance options for Michigan residents.
Earlier substitute legislation the Advance obtained would have required a 40 percent reduction to the personal injury protection (PIP) portion of a plan for the lowest-cost, lowest-medical coverage option. The next tier would result in a 20 percent PIP cost reduction and the third would have meant a 10 percent reduction.
But the latest substitute for Senate Bill 1014, sponsored by state Sen. Joe Hune (R-Fowlerville), appears to ax the provision that would have guaranteed rate reductions for those opting for lower PIP coverage, according to the memo.
It would prohibit the use of gender, marital status, occupation and education level. But it “eliminates the prohibited use of FICO/Credit scores” and “eliminates guaranteed rate reductions,” according to the GOP memo.
State Rep. Joseph Bellino (R-Monroe), a major House supporter of substitute legislation to create a tiered auto insurance system, said on Tuesday that Republicans were perhaps as many as seven votes shy — and that’s just on the GOP side of the aisle.
“It’s gonna be a heavy lift and we gotta make some compromises,” he said. “But I’m not sure without some real relief for people they’ll be happy with the bill we pass.”
But by Wednesday night, the plan doesn’t seem to be faring much better.
Gideon D’Assandro is a spokesman for House Speaker Tom Leonard (R-DeWitt), who supported similar legislation that failed to pass both chambers last year. D’Assandro noted that support is still lacking among Republicans.
He acknowledged the severe time crunch, as well. The Senate would have to act Thursday, after the House. And Meekhof would have to be convinced to run the bill.
“There is a short amount of time,” said D’Assandro. “… They’ve got a bit of a climb, and they know that.”
Democrats may be even less likely to support the plan, with Rep. Donna Lasinksi (D-Scio Twp.) and others calling it “smoke in mirrors” that does nothing to stop rating factors that have nothing to do with somebody’s driving record.
Some Democrats did support similar legislation supported by Detroit Mayor Mike Duggan that failed to pass both chambers last year. But Bellino agreed that passage could prove difficult without more Republicans on board.
The Republican memo outlining the key features of the latest substitute legislation said the plan would still offer a tiered personal injury protection coverage, just without the guaranteed rate reductions for people paying the premiums. Duggan is not on board with this plan, sources told the Advance.
BREAKING: It’s getting even worse in #lameduck. Under a newly revised bill, SB 1014 (H-3), insurers will be allowed to sell junk plans that don’t cover lifetime benefits for children injured in auto accidents. This is shameful and we need your help NOW. https://t.co/rVBZxdklTu pic.twitter.com/VZ0bxKUovx
— CPAN Michigan (@ProtectNoFault) December 19, 2018
The lowest-cost option would offer $250,000, with the majority — $225,000 — dedicated to emergency hospital care. The next tier offers $500,000 in PIP and the third is the state’s current unlimited no-fault coverage.
It would also allow seniors age 62 and older to opt for a much lower $50,000 PIP plan and would cap family-provided attendant care at 56 hours per week, limited to paying a $15 an hour salary for the attendant.
In a tweet tonight, the Coalition to Protect Auto No-Fault (CPAN) said that under the new proposal, “insurers will be allowed to sell junk plans that don’t cover lifetime benefits for children injured in auto accidents.” The group calls this “Every Child Can Be Left Behind.”
Oakland County Executive L. Brooks Patterson, a Republican, came out swinging against Gilbert’s effort on Wednesday. A longtime foe of no-fault reform, Patterson once appeared on “Off the Record” and compared a previous House speaker, Republican Jase Bolger, to Adolf Hitler for pushing a no-fault plan. Patterson even placed a black comb over his lip to resemble the Fuhrer’s moustache.
“He’s [Gilbert] going to have all the insurance he wants, OK, because he’s a billionaire,” Patterson told the Detroit News on Wednesday. “He’ll never have to be warehoused in a Medicaid facility. So for him to take this opportunity away from the middle class is, I think, an act of arrogance.”
Advance Editor Susan J. Demas contributed to this report.
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