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No-Fault Momentum Stalls; Cotter Calls Reforms ‘Huge Personal Priority’

May 4, 2015

A potential House vote on legislation capping medical reimbursements for victims of catastrophic car wrecks didn’t happen today as Republican leadership looks to round up the needed votes, but House Speaker Kevin COTTER (R-Mt. Pleasant) made it clear that the reforms were “a huge personal priority for me.”

The Speaker said the House has been looking at putting cost containment measures into the system for at least three straight sessions and “I want to see it done . . . I want to see meaningful reform that will reduce the cost of insurance in this state.” 

The admission comes after the Senate blasted out its plan within a couple days two weeks ago and the House Insurance Committee put its stamp on a plan the week after. Now, the momentum for further movement has stalled in the full House. 

Cotter and the rest of House leadership find themselves in the same pickle the prior two caucuses found themselves in. Resistance from moderate and Oakland County Republicans has the no vote count among R’s anywhere from 10 to 22, based on the source.

And the more time the Michigan Hospital Association (MHA) and the Coalition Protecting Auto No-Fault (CPAN) have to work members and the public, the more entrenched these “no votes” get. 

Attempts to secure votes out of Detroit have failed after Detroit Mayor Mike DUGGAN‘s insurance plain received a thumbs-down from a Detroit legislative delegation that doesn’t want to see constituents receive “second-rate” insurance so it can receive some rate relief.

To help move the needle, the Michigan Insurance Coalition (MIC) and the Insurance Institute of Michigan (IIM) held a joint news conference this morning with Senate Majority Leader Arlan MEEKHOF (R-West Olive), Senate Insurance Committee Chair Joe HUNE (R-Hamburg Twp.), Sen. Jack BRANDENBURG(R-Harrison Twp.) and Sen. Virgil SMITH, Jr. (D-Detroit). 

Pro-No-Fault reform advocates decried the latest MHA TV ads as being deceptive in that they imply that the state’s unlimited lifetime medical benefits will not be cut, when there is nothing in the legislation,  SB 0248, that says that, they said. 

“I feel like we’re playing whack-a-mole,” said MIC spokesperson Tom SHIELDS. “You beat one lie down and another one pops up.” 

The new law puts a $545,000 cap on catastrophic injuries, after which expenses would be covered by the new Michigan Catastrophic Claims Corporation (MCCC) of the state, but the MHA claims there’s nothing protecting consumers if the new MCCC, a state-run entity, goes bust. 

Rep. Mike CALLTON (R-Nashville) said the current Michigan Catastrophic Claims Association (MCCA), which now pays those benefits, has $18 billion in reserves, meaning they can essentially pay off the annual claims its receives through the interest earned on that $18 billion. 

In reality, instead of moving from the MCCA to the new MCCC, the MCCA should be subject to the Open Meetings Law and the Freedom of Information Act (FOIA), he said. If the public got to truly examine its books, Callton said he wouldn’t be surprised if the current $185-a-year MCCA charge set by insurance executives could be lowered to $25 annually. 

“I’m wondering if this annual rate is being artificially kept higher,” he said. 

The car insurance companies claim the legislation to set reimbursement rates at 150 percent of Medicare would not only save drivers in the $185 paid to MCCA, but in the personal injury protection (PIP) line on their bill, which (along with physical) is “moving out of sync,” said Mike McBRIDE of the Mason McBride Insurance company in Troy. 

The insurance industry has dropped a $1 million lifetime cap on benefits in the system from the original proposal launched by Gov. Rick SNYDER, but is holding firm to its desire for a “fee schedule” on provider reimbursement. IIM’s Pete KUHNMUENCH said without this piece, drivers would not see any substantive rate relief on their bills. 

So while common grounds seem possible for other no-fault reforms — a fraud authority, adjustments to how much in-home relative caregivers are paid — the provider reimbursement piece has become the third rail. 

Meekhof said he wants no-fault reforms that he feels would give his constituents the type of car insurance rate relief, but he said he’s not feeling the MHA or other groups are not serious about negotiation. 

“Do you feel like they’re negotiating in good faith?” MIRS asked Meekhof. 

“No.” he said. 

“You don’t feel like they want an answer, do you?” 

“No. I think they want to delay and do everything they can to not change this.” 

MHA spokesperson Ruthanne SUDDERTH said that is not the case at all. She said her group has been “offering solutions for some time,” the most recent being $500 million in “real money” for a 20 percent cut in costs for victims of catastrophic car accidents.

On Tuesday, House Minority Leader Tim GREIMEL (D-Auburn Hills) sent out a campaign solicitation for the House Democratic Fund based on the no-fault issue. Democrats have taken a caucus position against  SB 0248

“I know we ask for a lot, but we could really use a $25 donation today to help us advocate for victims to ensure they don’t lose the coverage they so desperately need,” Greimel wrote. 

Sen. Margaret O’BRIEN (R-Portage) said the Michigan Democratic Party robo-called her district on the no-fault issue last week, which isn’t the first time that’s happened. 

“I’m not sure why people are spending all this money against me, but they did it when I was in the House, too.” 

This led Shields to say, “This has become a political campaign.”

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