Updated: No-fault overhaul crashes and burns, but supporters vow 2019 fight

Updated, 4:00 a.m. Dec. 21

An attempt to overhaul the state’s auto no-fault law has died in the House before a vote ever took place, according to a statement released by House Republicans.

State Reps. Tom Barrett (R-Potterville) and Joseph Bellino (R-Monroe) had been pushing fellow Republicans to support tiered auto insurance options in a plan modeled after a measure last year backed by Detroit Mayor Mike Duggan and House Majority Leader Tom Leonard (R-Dewitt).

“We ran short on time this week with the 99th Legislature’s conclusion, but it does not mean the fight is over. We’ll be right back after the first of the year — full-throttle, working to roll back the out-of-control costs, once and for all. It’s been more than four decades of climbing costs caused by Michigan’s failed car insurance system,” Barrett and Bellino said in a joint statement.

They noted they’ll be pushing the issue again in 2019 as public support for changing the state law is “surpassing levels we’ve ever seen before.”

“It’s well past time to end the status quo that prioritizes powerful interest groups over drivers, and we look forward to coming back next year, working diligently to pass the critical reforms the people of Michigan not only demand of us, but deserve,” they said.

Bellino told reporters on Thursday he was optimistic about the 100th Legislature finally moving on an overhaul.

“I think we’ll come out, big guns,” he said. “If you look at our hard ‘nos,’ five of them are leaving and the people coming in ran on automotive reform. You look on the other side of the aisle, some of the Dems, ran on no-fault reform. So I think we’ll get something done. Even though we [Republicans] have less members, we have more ‘yeses’.”

Bellino also told reporters that despite their efforts, no-fault reform supporters just couldn’t scrounge up enough support in Lame Duck. He acknowledged earlier in the week to the Advance that reform would be a “heavy lift.” 

“We took the temperature down the hall [the Senate] and we were told that wasn’t going to fly. Nobody liked it,” he said on Thursday. “… The basic business premise is we have about the same amount of drivers as Ohio but they have over 200 companies running auto insurance in Ohio, we have less than 60. So there’s a business problem there; people don’t want to come to Michigan and buy auto insurance.”

Bellino said that his constituents need relief from high auto insurance rates.

“My district might be different than all my colleagues. Mine’s a 54.7 [percent] Democratic district. Over 40 percent of my people are retired or living at or below the poverty line. Maybe I’m a little more passionate than some of the people on my side of the aisle, but also I’m not beholden to hospitals because my hospital in Monroe is in Toledo. They don’t care about me; I don’t really care about them,” he said.

The Legislature’s failure to achieve no-fault reform wasn’t a big surprise — Senate Majority Leader Arlan Meekhof (R-Grand Haven) said he wasn’t interested in taking up the issue. Still, it’s become somewhat of a Lame Duck tradition to try.

Irresponsible drivers who cause victims to incur medical expenses beyond a capped no-fault policy will have zero liability for compensating the victim for uncovered medical expenses under SB 1014. Tell your legislators to vote NO on SB 1014! See more: https://t.co/mOyhIDXYbQ pic.twitter.com/1LUjJw70JN

— CPAN Michigan (@ProtectNoFault) December 19, 2018

The Coalition Protecting Auto No-Fault (CPAN) said the Legislature made the right call in leaving no-fault reform behind in Lame Duck.

“CPAN thanks legislators for listening to Michigan consumers by not rushing through a deeply flawed auto no-fault plan constructed in the last few days of this lame duck session,” said CPAN President John Cornack. “Given that a recent poll found that 65 percent of likely voters reject any plan to eliminate or limit medical benefits for auto accident victims, this was the right decision for our state.”

The group issued a statement that it is “committed to working with all stakeholders during the upcoming 100th legislative session on finding a fair and balanced solution to reduce costs for Michigan policyholders — while maintaining the care needed for those catastrophically injured in auto accidents.”

Maneuvering around no-fault began last week, with efforts coming into the open on Monday, as the Advance reported. There were various proposals that circulated and support was flagging on both sides of the aisle. Groups including CPAN and the Brain Injury Association of Michigan came out in full-throated opposition, saying the plan would not cover a lifetime of medical care in worst-case crashes.

Significantly, on Wednesday, a new plan backed by Quicken Loans founder Dan Gilbert was circulating that scrapped mandated insurance rate reductions. Lowering costs for Michiganders was the key reason both Republicans and Democrats have cited as justifications for changing the state’s no-fault law.

People in Detroit pay some of the highest premiums in the nation. But elsewhere in Michigan, many other motorists also pay higher rates than those in bordering states such as Ohio. That’s one reason Bellino said he was so passionate about this issue.

A spokesman for Leonard, Gideon D’Assandro, said the idea to scrap mandatory rate reductions was an attempt to win more GOP support.

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), appeared to ax the provision that would have guaranteed rate reductions for those opting for lower PIP coverage, according to a GOP memo the Advance obtained Wednesday night.

It would have prohibited 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,” the memo said.

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.

Reporter Andrew Roth contributed to this story.