By K.D. Norris
ken@wktv.org
The House of Representatives defeated an overhaul of Michigan’s no-fault auto insurance system on a 45-63 vote Thursday night after 90 minutes of debate on the House floor but months of political bickering and conflicting advertising efforts.
The Nov. 2 defeat of the house bill also brought conflicting reactions from local and statewide officials.
Wyoming- and Kentwood-area representatives Tommy Brann (R-77th District) and Steve Johnson (R-72nd) split their votes on the issue, with Johnson voting in support and Brann in opposition.
“Tonight, I voted in support of reforming Michigan’s no-fault insurance system,” Johnson wrote in a supplied Facebook post explaining his vote. “Michigan drivers pay the highest rates in the nation for car insurance, which is why this is one of the top issues many of you discuss with me all across the district. While the proposed plan wasn’t perfect, it was a step in the right direction to provide coverage choice, reign in fraud, and lower rates for Michigan drivers. Unfortunately, a majority of my colleagues did not vote in support … (however, I) … look forward to seeing the conversation on this important and meaningful topic continue in the future.”
While Brann said he thought “90 percent of the bill was good” he said the three-tiered approach to medical coverage limits was just not something he could go along with. “I have the obligation to my constituents,” Brann said to WKTV Friday. “An obligation to protect them and make the right decisions for them.”
He said he thought that if some families chose the lower medical limits and then were in an accident, it could be disastrous. “I’m thinking about the parent with a little girl, and they are in an accident and that little 10-year-old girl needs rehabilitation for the rest of her life.”
“This is important, and I hope we will continue to work on this,” he said. “But I just do not think it (this bill) would protect my constituents.”
Michigan’s high insurance rates in the nation, according to most critics, are because of the current no-fault insurance system’s unlimited medical benefits for people injured in car accidents, as well as insurance companies’ ability to charge different rates based on where people live — a particular problem for urban areas such as Detroit.
Few believed the packages of changes, House Bill 5013, was a complete fix for the many problems of the existing system, but some viewed it as a start in providing rate-payer relief from the highest auto insurance rates in the nation.
Supporters of the bill, including the Michigan Chamber of Commerce, said the bill “could” save motorists and businesses as much as $1 billion a year by allowing persons buying insurance choices on what amount of medical coverage they need buy. It also would have imposed price limits on medical providers who care for auto accident victims.
In general, the bill was also supported by auto insurance providers, but opponents often pointed out that there were not guarantees that insurance rates would go down — something one local insurance agent did not agree with.
“While there are no guarantees, anytime you install a reimbursement schedule that caps charges at a lower rate than today it would seem a good thing” for rate payers, Pat Curran, managing agent of Wyoming’s Precision Insurance Agency, said to WKTV. “One of the hardest parts in insurance pricing is knowing what your costs are going to be. Under the current system there is no such pricing structure.”
In general, the bill was opposed by the state’s medical providers and trial lawyers, but it also was opposed by lawmakers and others who pointed out that there was no guarantee that insurance providers would lower rates as a result of the changes.
“The Michigan Health & Hospital Association has been adamantly opposed to House Bill 5013 throughout deliberations on the bill, and we are encouraged by the fact that the Michigan House of Representatives opted to vote down what was simply a bad bill,” Brian Peters, CEO at the MHA, said in a statement released on their website Thursday night.
“We know that Michigan drivers want lower rates when it comes to their auto insurance premiums, and we would welcome the opportunity to work with legislators if and when they decide to go back to the drawing board when it comes to meaningful rate relief for drivers that protects benefits available to those seriously injured in auto accidents.”
The Michigan Chamber of Commerce also reacted to the defeat of the bill, saying in a statement that it was disappointed in the “63 of the 110 members of the Michigan House who turned their backs on Michigan drivers today and voted ‘no’ on reforms to the state’s broken and costly auto insurance system.”
“Lawmakers had a real opportunity today to drive down Michigan’s highest-in-the-nation auto insurance premiums,” Rich Studley, chamber president & CEO, said in the statement. “Unfortunately, 63 members of the Michigan House chose to turn their backs on their constituents and the state’s 7.1 million drivers and side with a handful of greedy ambulance-chasing personal injury attorneys and hospitals that profit from the status quo.”
“Even though the vote today failed, these lawmakers will need to explain their no vote to their constituents,” Jim Holcomb, general counsel for the chamber, said in the statement. “We remain confident that the drivers of our state won’t find these lawmakers’ excuses acceptable and force them back to the table to tackle the very real problem of Michigan’s highest-in-the-nation auto insurance costs and its primary cost-drivers.”
