The Republican-led House will consider legislation that would cut auto insurance premiums in Michigan by $100 annually for two years and no longer let health providers charge car insurers much more to treat injured motorists than health plans are billed.
The measure won approval 9-6 along party lines on April 23 in the House Insurance Committee, which amended the Senate-passed bill to require a rate rollback and limit medical charges to 150 percent of what Medicare would pay.
Michigan is the only state to require unlimited medical benefits for those injured in crashes, which the insurance industry and Republicans contend has contributed to high premiums. The insurer-run Michigan Catastrophic Claims Association, which is funded with a $186 annual per-vehicle fee assessed on drivers, covers seriously injured motorists whose medical bills and rehabilitation costs exceed $530,000.
“We had seven hours of testimony and heard from people on both sides of the issue, and I believe we have come up with bills that protect families from exorbitant premium rates while at the same time ensuring that those suffering catastrophic injuries in auto accidents receive the best care possible,” said Insurance Chairman Tom Leonard, a DeWitt Republican.
Rep. Tom Cochran of Mason, the panel’s highest-ranking Democrat, criticized the legislation.
“These so-called `reforms’ will increase unfunded care for hospitals, reduce pay for medical professionals and ultimately leave victims of catastrophic accidents with fewer options and higher bills,” he said.
The main bill flew through the GOP-controlled Senate in two days. The House has no “firm timeline” for voting, said Gideon D’Assandro, spokesman for House Speaker Kevin Cotter.
Lawmakers’ attempts to overhaul the state’s auto “no-fault” law have stalled for years because of conflict between the insurance and health care industries and resistance from injured motorists and their families. Unlike bills introduced in the last two-year session, the House and Senate plans do not include proposed lifetime caps on benefits.
Under the House version, insurers would have to reduce premiums by $100 for any policy issued or renewed after June 30, 2016. Premiums could be not be increased for two years unless there is a “change in a risk classification that results from actions of the insured.”
The proposed fee schedule linked to Medicare payments also would take effect in July 2016. Like the Senate, the House committee also voted to create an insurance fraud authority, restructure the MCCA into a new entity and spend $150,000 to study the effects if the bill becomes law — making it immune to a voter referendum.
John Cornack, president of the Coalition Protecting Auto No-Fault, said the restriction on medical charges would cost hospitals tens of millions of dollars each.
“This is not a scare tactic. If SB 248 passes as is, trauma centers will be threatened in every area of the state. From that standpoint alone, this bill is irresponsible,” he said.
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