(Source: MIRS.news, Published 10/11/2023) Executive Director Erin McDonough of the Insurance Alliance of Michigan says drivers purchasing unlimited personal injury protection (PIP) coverage could see a $200 to $300 increase, at least, under legislation reforming Michigan's 2019 auto law.
Wednesday, the Senate Finance, Insurance and Consumer Protection Committee continued to take testimony on SB 530 and SB 531, legislation revamping Michigan's 2019 auto insurance reform to reimburse care providers for those catastrophically injured in a car accident with – in many cases – 250% of whatever Medicare finances for the same services.
Although SB 530 and SB 531 do not alter the reform's key component, which was making unlimited PIP coverage optional for Michigan drivers, McDonough told the committee that residents purchasing less-than-unlimited PIP coverage would see a $100 to $200 cost increase, at minimum.
While the alliance is still reviewing the possible impacts of the legislation, McDonough said the bills "move the cost of care far from the original intended goal of reform, which was an attempt to normalize the medical costs associated with auto no-fault with other health care reimbursement platforms."
"Initial estimates on the cost added to the system from these bills are at a minimum of $1.2 billion annually," she said, before asking lawmakers to review how the current legislation could authorize increased care-related charges in comparison to the present-day billing system and pre-2019 billing.
Rocket Companies, the Detroit-based financial services company that played an influential role in negotiating the 2019 reform, has decided to support adjusting the latest law to improve care reimbursements for catastrophically injured drivers.
However, during Wednesday's meeting, Vice President Jared Fleisher of Government Affairs for Rocket Companies expressed opposition to how the 250% Medicare-related provision would widely apply across the healthcare industry. Specifically, he described concern that the legislation would boost profits for major health systems and MRI centers "at the expense of your constituents."
"This bill says '250% for everybody.' This bill raises the cost of care by 31% for most care," Fleisher said. "This means your constituents…somebody who works two jobs, a single mom trying to take care of her kids…in total, your constituents will pay over a $1 billion more in auto insurance – for what purpose? To get more care? No. To get additional benefits? No . . . to increase profits of major health systems, MRI clinics . . . it is wrong."
Chief Operating Officer Eric Poe of CURE Auto Insurance – a New Jersey-headquartered auto insurance agency, representing 85,000 vehicles in Michigan after expanding here specifically due to the 2019 reform – asked the Senate panel to adopt a definition making the new reimbursements exclusive to those most seriously devastated by a catastrophic accident.
In New Jersey, someone qualifies as being catastrophically injured if they suffer from a permanent disability, lose bodily functioning or have a permanent disfigurement.
"If this bill is truly to address catastrophically injured people, I believe that this has missed the mark primarily because catastrophically injured individuals make up less than 1.5% of all of the no-fault injury protection claims," Poe said. "This bill literally increases the rates . . . for every single procedure billed to car insurance companies."
The Senate committee did not vote on the legislation Wednesday. Groups like the Michigan Chamber of Commerce and the National Association of Mutual Insurance Companies have now come forward with their official opposition.
