On March 24, 2011, two bills introduced in the Michigan Senate (SB 293 and SB 294) were referred to the Senate Committee on Insurance. If enacted, these bills would fundamentally change the basic nature of the Michigan auto no-fault system.
Senate Bill 293 — PIP Cost Shift:
1. Insurance companies would be authorized to sell auto policies with maximum no-fault personal injury protection (PIP) benefits as low as $50,000. Victims suffering catastrophic injury resulting in medical expenses higher than the selected limits – including children who never had the right to choose – would be forced to turn to Medicaid, Medicare, or health insurance, thus increasing the burden on Michigan taxpayers and the health insurance system.
2. Persons who do not own automobiles, and thus have no insurance coverage or who do not live with relatives, who have no-fault insurance coverage, would be limited to $50,000 of no-fault PIP benefits. This would create a potential for great economic hardship for senior citizens and disabled people who do not drive, forcing them to turn to Medicaid or Medicare and again increase the burden on Michigan taxpayers and the health insurance system.
3. Victims who incur medical expenses in excess of the PIP benefit limits they selected would be able to sue the at-fault driver for the excess expenses, thus increasing litigation and leaving many consumers with no choice but to buy higher liability insurance protection, thereby increasing insurance premiums.
4. Workers who draw no-fault PIP benefits under insurance policies issued to their employer would arguably be limited to the coverage chosen by the employer regardless of whether the worker chose to purchase higher coverage on their personal auto insurance policy.
5. Most no-fault PIP claims paid through the Assigned Claims Facility would be limited to $50,000 of coverage, thereby increasing the burden on health insurance, Medicaid, Medicare, and ultimately the taxpayers.
6. More no-fault claims would be paid on a coordinated basis, thereby requiring many accident victims to first exhaust their health insurance coverage before no-fault benefits would be payable.
7. Medical providers serving severely injured patients who selected inadequate PIP benefit limits would no longer be able to provide services, thus resulting in a significant loss of jobs in the health care industry and a reduction in access to necessary medical care.
Senate Bill 294 – Home Care and Fee Schedules
1. Benefits payable for attendant care or nursing services rendered to an injured person in his or her home are subject to two caps:
a) A weekly hours cap – This cap would limit payment for in-home attendant care and nursing services to no more than 56 hours per week if performed by an individual who is not certified, registered, or licensed to render such care.
b) An hourly rate cap – This cap would limit payment for in-home care performed by an individual who is not certified, registered, or licensed to render such care to no more than $11 per hour for “basic care” and no more than $17 per hour for “skilled care.” If the services are performed by an individual who is certified, registered, or licensed to render such care, payment for such services could not exceed $17 per hour, which is far below the standard commercial rate.
Both caps are applicable to family provided in-home care as well as in-home care rendered by commercial agencies and hospitals.
2. Workers compensation fee schedules will be applicable to every physician, hospital, clinic, institution, or other person rendering treatment to auto accident victims. No provider charges in excess of those set forth in the workers compensation fee schedules would be compensable. This would result in a significant loss of revenue for major Trauma Centers, a reduction in medical services, and a loss of jobs.
3. The provisions dealing with in-home care and fee schedules are applicable immediately upon passage of the bill, regardless of whether the patient sustained injury in an automobile accident occurring before the bill was passed. In other words, the new rules would apply retroactively to all existing claims.
Senate Bills 293 and 294 are a clear confirmation that the Michigan auto insurance industry desires to effectively repeal Michigan’s model no–fault insurance system. If these bills are enacted, the consequences would be dire and would include, among other things, the following:
- Increased Taxes
- Increased Health Insurance Costs
- A Loss of Jobs
- Reduced Access to Medical Care
- Increased Insurance Premiums
- Increased Litigation
- Limited Insurance Coverage
It is important to note that there is absolutely no guarantee in these bills that insurance companies would significantly reduce auto insurance premiums and keep those premiums reduced for a significant period of time. Stated differently, the loss of essential insurance benefits resulting from this legislation would be permanent, while any rate relief that may occur would likely be minimal and temporary.
In short, these bills are bad for drivers, bad for taxpayers and bad for Michigan!
Vote NO on SB 293 & 294.
Your article is very slanted. You obviously havent noticed how the current system has made most health care facilities and even the physiicans in the State of Michigan look like ambulance chasing attorneys, striving to increase their revenue with automobile insurance reimbursements for services at a rate 10 time medicare. Look at your current auto insurance premiuims and note the outrageous amounts paid as a result of Michigan being on of the last states in the union to not cap catastophic claims. Vote Yes and stop the medical profession from treating people solely for over reimbursed financial gain with treatments that have no scientifically proven benefit (i.e. pain stimulation therapy, manupulation under anesthesia, the use of fluoroscopy for chronic pain injections).
I’m not an expert in the Michigan No-Fault auto insurance plan, but I have heard very good things about the coverage for people who are seriously injured in motor vehicle accidents. My question concerns the cost to Michigan drivers who are paying for this “gold plated” policy. I teach medical students and interns from many different states, and they all seem to complain that Michigan has higher auto premiums than they are accustom. Either way, responsible Michiganders are paying. Please enlighten me on the No-Fault details.
Michigan No-Fault right now has an unlimited PIP coverage so that if someone was to get into a catastrophic car accident they would be able to have any medical and therapy needs taken care of for as long as it takes until they are back to their pre-accident condition. Yes as of now we pay ridiculously high auto insurance premiums to cover this unlimited PIP coverage and even though these bills don’t actually say that they will lower these premiums that is what our government is telling us. Even if our premiums would go down, our health insurance premiums would go up because if someone had good enough health insurance that it covered what was left after the new limited PIP it would cost our health insurers more. And if someone didn’t have health insurance and they were in a car accident then they would have to turn to medicaid or medicare in turn raising our taxes as well. If this bill was to be passed it would increase litigation so people wouldn’t need to rely on medicaid/medicare, it would raise taxes, health insurance premiums, and our auto insurance premiums probably wouldn’t go down anyway. Our No-Fault insurance coverage is wonderful and one of the best things about Michigan. And for the first time in many years our government is actually considering this, why? Because they’re putting the insurance companies of Michigan over the “responsible MIchiganders”. Thank you for your concern and actually trying to understand before bashing our way of doing things.
I have grown up in Michigan, moved to California, and recently moved back to Michigan, and I hate to tell you, but we do not have ridiculously high insurance premiums. I pay less in the State of Michigan for better coverage. I have chosen the lowest deductable, which makes your premium higher, and I still pay less than I did in California, which is a tort state. Michigan’s Auto No fault policies offer an amazing amount of coverage for people who require a great amount of care. What most people do not understand, without experiencing a car accident themselves, is the cost incured in medical bills even when the accident is minor, are astronomical. Also, has anyone noticed that Senate Bills 293 + 294 do not ensure lower insurance premiums. The only thing 293 ensures is that you will have less coverage if you choose a PIP as low as $50,000. Bill 294 guarantees that there will be less reimbursement to an already taxed medical system. There are so many facilities that provide an amazing amount of care to people that have been in auto accidents, and these facilities are going to suffer from the loss of reimbursement that these bills are proposing. Please vote NO on Bills 293 + 294.
Did you hear the story that Lester Graham had this morning on NPR? It was about the auto no-fault law, and what it will mean. Please vote NO on Bills 293 + 294!
http://www.michiganradio.org/post/consequences-eliminating-mandatory-no-fault-auto-insurance
Michigan drivers are going down a road fraught with danger — to themselves and every other citizen on the roadways — if they don’t take the time now to learn about what they currently have (in terms of MI no-fault auto insurance) and what the insurance industry would love to take away from them. Michigan drivers would further benefit to consider exactly what constitutes a “catastrophic” injury: too often, it seems, people think about the severely brain-injured victim … amputations, paralysis, and the like … and those individuals whose injuries require around-the-clock care. “Catastrophic” is just one careless second away, as close as the driver next to you, behind you, ahead of you. And $50,000 isn’t going to cover most “catastrophes.” I know. I “walked away” from my MVA in 2004, but with a serious injury to my spine. When conservative treatment was unsuccessful and my physicians recommended me for disc replacement surgery, my no-fault carrier balked, denying my injury altogether. I was left with no medical remedy, and unable to sustain my life — unable to work, in constant pain, and on loads of meds. The surgery in the U.S. would have cost me around $50,000 (no follow-up PT, nothing but the surgery). In Germany, it was $28,000. So I had to leave my country … count on the generosity of other Michigan citizens … and, eventually, take my auto carrier to court, where they were found liable for the medical costs. Had I waited for that decision, I don’t know that I’d be walking, or alive, today. I know “catastrophic.” It doesn’t end with the bang of one car running into another. You’re looking at potential life-time medical costs, and $50,000 lifetime limits — no matter how you slice it — falls far short of what you would need, should YOUR automobile end up on the wrong end of another car “behaving badly.” Physicians, caregivers, the medical community, and injured people know this. So do auto insurance companies. Who would you trust your care to? I’m solidly on the side of the people who care for me, and about me — not with claims adjustors who have only a financial interest in my well-being. Lobby hard and loudly that Bills 293 and 294 get flattened, like so many injured people do — first, by the injuries they sustain in motor vehicle accidents and, then, by their “good hands,” “good neighbor” insurance companies. I didn’t think “it” would happen to me, either. But it did. And “it” can happen to you, or your loved one, just that quickly.
Mr. Lock I think you ought to ask more health care companies about the overly generous auto insurance companies. I work for a home care company and I cannot tell you the number of times insurance companies have refused to pay for the services we provide. Most of the time we end up having to settle for a lot less then the billable amount originally set up. When I was a case manager I often saw where the other care providers also had to settle for much less then what was standard. Health care is not what drives up the cost of your insurance. The medical portion is only about 30% of your total bill. Look at your bill and notice how much you are paying for collision and property damage. On top of this you also have to carry under/ uninsured motorist insurance which will probably go way up if these bills are passed. I think it should offend all voters that the legislature has taken it upon themselves to repeal a law that the voters enacted.
I am a mother of a TBI victim.This bill will greatly decrease the the chance of my child moving forward in recovery.I am not saying there is not room for reform in this bill,but a closer look at the everyday life of an accident victim and the ones that care for them would maybe give our goverment a better idea of what the needs are in these kinds of cases.I am my childs 24/7 care giver,and yes i get paid for that.But with the caps they want to put on caregivers will not even cover the bills for a month(house payment,lights, heat, and supplies not covered by ins. company.)I can not go out and work,because I need to be here to take care of my child.It’s a labor of love, but a very tough job.I am just afraid this bill would slow my childs progress.As we would then have to put him on medicaid,and our state cannot afford that.I’m not in this to make money,I would be fine with just having enough to make sure his needs are met.There has to be a better comprimise out there that can be reached so that accident victims don’t have to give up what they need to get better.I am concerned that the victims will not get the proper amount of therapy and care they need if this bill passes.Being a mother is a hard enough job,then throw in a TBI and it becomes so much harder,then add this bill and life becomes a nightmare.PLEASE VOTE NO.
Thank You,
TBI MOM
Please VOTE NO !
All, there are laws that prohibit hospitals and doctors to charge different amounts for the same services. The law also prohibits charge differences for different payers groups. So someone having a CT Scan is charged the same if is related to a tuomor or a result of an auto accident. I’ve worked in the billing department for hospital and can say that hospitals are closely audited by many sources to ensure all HIPPA and billing guidelines are followed.
The current adds on the radio and TV are misleading. The negative impact of these bills on those severely injured would be significant. Benefit deductions would add a financial burden and may even prevent people from seeking the care they need. In addition, the proposed legislation would have another negative effect on this states already struggling economy with shifting costs to Medicaid, increased taxes, job losses, and increased litigation. The potential for job losses is across all industries from health care, automotive and to each an every mom or pop employer that losses a hard worker due to auto related trauma.
VOTE NO to these bills and ensures benefits are there when we need them.