Michigan Senate Leader: Any Mandated Car Insurance Rate Cut Is ‘Dead’

Any proposal to automatically cut premiums for Michigan drivers would be “dead” on arrival in the Republican-led Senate, Majority Leader Arlan Meekhof said, bringing into question lawmakers’ long-sought aim to enact major auto insurance changes.

Meekhof, on the Legislature’s first day of session after a summer recess, said he met last week with Detroit Mayor Mike Duggan, who wants a mandated rate reduction of up to 30 percent in a state with the most expensive premiums in the country. Premiums are especially high in his city.

“That’s price fixing,” said Meekhof, who declared the idea “dead” three times. “When do Republicans get in between a private transaction and set what prices are? The market should dictate what they are based on risk and other factors that (insurers) account for.”

Meekhof’s pronouncement may lead to a confrontation with GOP House Speaker Tom Leonard, who is pushing unspecified changes to an auto insurance system that is expensive for drivers but also provides them with unlimited lifetime care if they are catastrophically injured.

“Everything is on the table for him to get reform done,” said Leonard spokesman Gideon D’Assandro. “Rate relief for Michigan families is his top priority in no-fault reform.”

Republican Gov. Rick Snyder in 2013 proposed a mandatory $125 per-vehicle reduction in premiums in concert with capping personal injury protection at $1 million, but that legislation never gained traction. Neither did Duggan’s 2015 proposal to let Detroit drivers buy cheaper health coverage and have their medical insurers pick up costs exceeding $275,000.

State law allows health care providers to charge much more for treatment of auto injuries than other ones. The insurance industry supports a fee schedule set in law similar to what exists for workers’ compensation injuries.

But Meekhof, who opposes set fees for hospitals, said he would prefer to focus on a deal between hospitals and insurers that emerged in last year’s “lame-duck” session but ultimately was not enacted — creating a statewide fraud authority, limiting reimbursement for family attendant care and capping medical benefits for people injured in crashes who have no auto insurance. The assigned claims plan largely covered pedestrians and bicyclists initially, but the benefits have increasingly aided passengers hurt while riding in uninsured vehicles.

Duggan, in a statement, said he is “working very hard to build a coalition for a bipartisan package on car insurance with major guaranteed rate rollbacks.”

“I expect us to try for passage in the House of Representatives first, and then to the Senate,” the mayor’s statement read. “Senator Meekhof has been a longtime champion of cutting car insurance rates and it’s my hope that by the time we get to the Senate, we can reach agreement on a plan that has his support.”

Topics Auto Leadership Michigan Politics